What is the Full Form of SENSEX?

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SENSEX full form

The full form of SENSEX in the stock market is Stock Exchange Sensitive Index. It is the oldest stock exchange in India which is also known by its other popular name, BSE or Bombay Stock Exchange. Moreover, SENSEX includes a free float, economy-weighted index of 30 some of the most financially stable and prominent organizations. Interestingly, these companies are also known as Blue chip companies in India. 

Also Read: What is the Full Form of NIFTY?

Why is it Called Sensex?

SENSEX is an interesting term which was coined by Deepak Mohoni, a stock market enthusiast and professional. It is actually a portmanteau of two terms- Sensitive and Index. 

Companies Mentioned in SENSEX

The companies mentioned in SENSEX are selected based on different criteria such as their economic efficiency. Here are a few popular examples:

  • Tata Steel Limites
  • State Bank of India
  • Wipro Limited
  • Tata Motors- DVR Ordinary
  • Kotak Mahindra Bank Limited
  • NTPC Limited
  • Infosys Limited
  • ICICI Bank Limited
  • Bajaj Auto Limited
  • Coal India Limited
  • Bharti Airtel Limited

Also Read: What is the Full Form of BSE?

What are the Advantages of SENSEX?

The prominent advantages of SENSEX include:

  • SENSEX offers innumerable growth opportunities such as acquisitions, expansions, and mergers. 
  • It offers greater transparency and can significantly boost a company’s overall reputation in the market. 
  • SENSEX helps companies raise their share capital. 
  • It can also improve your knowledge about stocks. 

Also Read: What is the NASDAQ Full Form?

How is Sensex Calculated?

Understanding how is SENEX calculated can be a little complicated. In simple words, the Free Float market capitalization of all 30 companies is calculated and added to get a total. The basic formula of SENSEX is:

SENSEX = (total free-float market capitalization/ base market capitalization) * Base index value.

Also Read – What is the Full Form of NIFTY?

Advantages of SENSEX

The advantage of SENSEX is –

  • The SENSEX index provides clearer insight and boosts a firm’s standing. It elevates the value of the firm’s stock and also boosts its perceived worth.
  • It also fortifies the firm’s standing by including the leading companies that stand out for their achievements.
  • This allows a business to increase its capital through the sale of shares.
  • The SENSEX index opens up possibilities for growth, including mergers, expansions and acquisitions.
  • It offers a range of additional advantages too, like the opportunity for employees to improve their efficiency in sharing risks and receiving incentives.

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