The BSE CPSE Index is to measure the performance of the Central Public Sector Enterprises (CPSEs) listed on the BSE. The CPSEs are companies that hold 51% or more, and they also own the 53-stock diversified index of the central government of India. The BSE CPSE stocks comprise 13 sectors, including Healthcare, FMCG, Agriculture, Telecom, Finance, Capital Goods, Oil and Gas, Power, Chemicals and Petrochemicals, Tourism, and Transport Equipment.   

The BSE CPSE index was launched on 29 September 2014. Index the first value date is on 8 July 2008, the base price of the BSE CPSE index is 1000. The cost of the S&P BSE CPSE has reached the level of 1,500 at a -6.4x P/E multiple—the weighted average cost of carbon intensity of the BSE CPSE index rounds up to 3,260. 

The index value calculates the free float market capitalisation value at the end of the date. The BSE index CPSE is calculated on two currencies, INR and USD. The BSE CPSE is refurbished twice a year in June and December. BSE CPSE has an index variant in the form of S&P BSE CPSE TR for both currencies. 

The S&P BSE CPSE index is owned and managed by the S&P BSE Index Committee, which is established under Asia Index Private Ltd. It is a joint venture of S&P and BSE Ltd. The BSE CPSE is appropriate for benchmarking a fund portfolio and launching the index funds for a liquid and diversified exposure to CPSEs.  

The S&P BSE CPSE share price is computed as a weighted average of the 53 stocks. It is based on the float-adjusted market capitalisation value, which uses the dividend methodology of the S&P Dow Jones equity indices. Index weight reallocation is done twice a year based on the free float market capitalisation.

Here are some eligibility criteria to be included in the BSE CPSE index:

1. It is mandatory to be listed on the Bombay Stock Exchange.
2. They were required to increase the 51% by the central government or CPSEs.
3. It should be domiciled in India.
4. They do not include the public sector company, as they are not classified as CPSEs.
5. The index value is calculated by Index value = Index Market Value / Divisor, Where Index Market Value = Price * Shares * IWF (Float Factor) *Fx rate 
6. Divisor = Market Value / Index Value 

1. Ownership

The company must be a central public sector enterprise, and it holds a 51% stake in the company, either directly or indirectly, by the government of India.

      2. Listing 

The company must be listed on the Bombay Stock Exchange (BSE).

       3. Sector

The BSE CPSE stocks comprise 13 sectors, including Healthcare, FMCG, Agriculture, Telecom, Finance, Capital Goods, Oil and Gas, Power, Chemicals and Petrochemicals, Tourism, and Transport Equipment, as identified by the Department of Disinvestment (DoD).

       4.  Liquidity

The stock must contain a minimum free float market capitalisation and meet the liquidity criteria, such as trading frequency, average daily turnover, etc, which the Bombay Stock Exchange sets.

1. Theme

 They focus only on the Central public sector enterprises, where the government of India hold the 51% stake.

     2. Constituents

They include the major PSU companies from sectors like Healthcare, FMCG, Agriculture, Telecom, Finance, Capital Goods, Oil and Gas, Power, Chemicals and Petrochemicals, Tourism, and Transport Equipment.   

      3. Index Type

The thematic equity index is designed to track the public sector undertaking performance.

       4. Weighting Method

Constituents are weighted based on the free float market capitalisation, with a cap on individual stock weight to avoid over-concentration.

1. Government Policy Dependence

Government decisions, such as subsidies and price regulations, heavily influence CPSE companies. Any policy change directly impacts their stocks, such as fuel pricing, disinvestment push or taxation.

     2. Sector Concentration Risks

 The energy, oil & gas, power and minerals companies heavily influence the index. The lack of diversification makes it vulnerable if these sectors underperform.

    3. Dividend Dependency

Many CPSE companies are generally known for their high dividends, which are beneficial for income seekers. However, when the government uses the funds for fiscal needs, excess dividend payouts can weaken future growth.

    4. Global commodity price risk

Most CPSEs, such as Oil India, NTPC, Coal India, and ONGC, depend on global crude oil, coal, and power trade. Are there any fluctuations in international prices that affect the price margins.

The BSE CPSE Index is to measure the performance of the Central Public Sector Enterprises (CPSEs) listed on the BSE. The company must be listed on the Bombay Stock Exchange (BSE). They include the major PSU companies from sectors like Healthcare, FMCG, Agriculture, Telecom, Finance, Capital Goods, Oil and Gas, Power, Chemicals and Petrochemicals, Tourism, and Transport Equipment. Government decisions, such as subsidies and price regulations, heavily influence CPSE companies. Any policy change directly impacts their stocks, such as fuel pricing, disinvestment push or taxation.  It is based on the float-adjusted market capitalisation value, which uses the dividend methodology of the S&P Dow Jones equity indices.