A lot has been heard that to create wealth one should invest in equity. It’s a common discussion that returns in equity over a period of time covers inflation. At the same time one may wonder how to invest in shares. A simple understanding of the stock market may help a layman to plan his investments as per ones needs.
Here I present a simple understanding of the two indices showing the various industry segments it is spread across, the proportion of each industry with number of companies and market capitalization. This will provide brief insight into the industries affecting index values. For a healthy portfolio investment must be spread across different sectors.
National Stock Exchange (NSE) was started in 1992. It is commonly indicated as NIFTY 50, currently 51 securities. NSE index is spread across 25 different industries with largest number occupied by private banks followed by IT Software and pharmaceutical & drugs together. As per market capitalization IT Software occupies 16.44%, private banks 15.65%. Market capitalization of pharma sector is low when compared to the number of companies.
Bombay Stock Exchange (BSE) was established in 1875, it is Asia’s first stock exchange. It is spread across 19 industries with 29 scrips. Among this pharmaceutical & drugs stand at 13.79%, private banks & IT Software 10.34% each. IT Software again tops the list with 17.73% of market capitalization, private bank at 13.55%. Pharmaceutical & drugs has market cap of only 7.90%, whereas refineries and cigarettes/ tobacco has market cap 7.73% and 6.47% with only 1 company each in both the industries.
Real estate construction has not find place in both the indices. Pharma sector in both the indices occupies dominant position in total number of companies, but not as much in market capitalization.
NSE
|
Industry |
number of companies |
% |
Market cap (Rs crore) |
% |
|
Automobile two & three wheelers |
3 |
5.88 |
190203.54 |
3.48 |
|
Automobiles- passenger cars |
2 |
3.92 |
147376 |
2.69 |
|
Automobiles- Trucks/LCV |
2 |
3.92 |
153936.15 |
2.81 |
|
Bank- private |
7 |
13.73 |
856367.5 |
15.65 |
|
Bank- public |
1 |
1.96 |
199620.4 |
3.65 |
|
Cement & construction materials |
3 |
5.88 |
150905.16 |
2.76 |
|
Cigarettes/tobacco |
1 |
1.96 |
271905.42 |
4.97 |
|
Diversified |
1 |
1.96 |
37837.7 |
0.69 |
|
Engineering- construction |
1 |
1.96 |
127713.3 |
2.33 |
|
Engineering- industrial equipment |
2 |
3.92 |
89625.01 |
1.64 |
|
Finance- housing |
1 |
1.96 |
193110.48 |
3.53 |
|
Household & personal products |
1 |
1.96 |
179182.4 |
3.27 |
|
Industrial gases & fuels |
1 |
1.96 |
52451.65 |
0.96 |
|
IT-Software |
5 |
9.80 |
899811.3 |
16.44 |
|
Metal- non ferrous |
1 |
1.96 |
36187.11 |
0.66 |
|
Mining & minerals |
1 |
1.96 |
192712.14 |
3.52 |
|
Oil Exploration |
1 |
1.96 |
239811.23 |
4.38 |
|
Paints |
1 |
1.96 |
89968.16 |
1.64 |
|
Pharmaceuticals & drugs |
5 |
9.80 |
371801.32 |
6.79 |
|
Port |
1 |
1.96 |
54310.66 |
0.99 |
|
Power generation/ distribution |
3 |
5.88 |
225396.54 |
4.12 |
|
Refineries |
2 |
3.92 |
416364.08 |
7.61 |
|
Steel & iron products |
1 |
1.96 |
37588.71 |
0.69 |
|
Telecommunication- service provider |
3 |
5.88 |
215154.08 |
3.93 |
|
TV Broadcasting & software production |
1 |
1.96 |
42752.21 |
0.78 |
|
Grand Total |
51 |
100 |
5472092.25 |
100.00 |
BSE
|
Industry |
Number of companies |
% |
Market cap (Rs crore) |
% |
|
Automobile two & three wheelers |
2 |
6.90 |
134788.27 |
3.21 |
|
Automobiles- passenger cars |
2 |
6.90 |
147376 |
3.51 |
|
Automobiles- trucks/ LCV |
1 |
3.45 |
158401.76 |
3.77 |
|
Bank- private |
3 |
10.34 |
569618.92 |
13.55 |
|
Bank- public |
1 |
3.45 |
199620.4 |
4.75 |
|
Cigarettes/Tobacco |
1 |
3.45 |
271905.42 |
6.47 |
|
Engineering- construction |
1 |
3.45 |
127713.3 |
3.04 |
|
Household & personal products |
1 |
3.45 |
179182.4 |
4.26 |
|
Industrial Gases & Fuels |
1 |
3.45 |
52451.65 |
1.25 |
|
IT- Software |
3 |
10.34 |
745195.58 |
17.73 |
|
Mining & Minerals |
1 |
3.45 |
192712.14 |
4.58 |
|
Oil exploration |
1 |
3.45 |
239811.23 |
5.70 |
|
Paints |
1 |
3.45 |
89968.16 |
2.14 |
|
Pharmaceuticals & Drugs |
4 |
13.79 |
332260.16 |
7.90 |
|
Port |
1 |
3.45 |
54310.66 |
1.29 |
|
Power Generation/ Distribution |
2 |
6.90 |
225396.54 |
5.36 |
|
Refineries |
1 |
3.45 |
325110.75 |
7.73 |
|
Steel iron & products |
1 |
3.45 |
37588.71 |
0.89 |
|
Telecommunication- service provider |
1 |
3.45 |
120701.49 |
2.87 |
|
Grand Total |
29 |
100 |
4204113.54 |
100.00 |
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