BSE PSU Bank Share Price

The BSE PSU Bank index is a sectoral index designed to track the performance of public sector banks listed on the BSE. It reflects trends within government-owned banking institutions.

The index includes 10 banks that are classified as Public Sector Undertakings (PSUs) under the banking industry. These institutions play a key role in credit distribution, financial inclusion, and government-led banking initiatives.

By focusing only on PSU banks, the index provides a clear view of how government-owned banking institutions are performing within the broader financial sector.

The BSE PSU Bank index follows a classification-based approach to identify eligible public sector banks.

1. Step 1: Universe Definition

   
   Companies are selected from the BSE 500 index.

2. Step 2: Industry Classification

   
   Only companies classified under the banking industry are considered. This classification is based on the Common India Industry Classification Structure (CIICS).

3. Step 3: PSU Filter

   
   Companies must be classified as Public Sector Undertakings (PSUs) under the BSE Scrip Category.

4. Step 4: Eligibility Criteria

   
   Only common stocks are considered for inclusion.

5. Step 5: Final Inclusion

   
   All eligible PSU banks meeting the above criteria are then included in the index.

The BSE PSU Bank index is calculated using the free-float market capitalisation method with stock-level caps.

1. Step 1: Free-float Market Cap calculation

   
   The first step is to calculate the free-float market cap of all stock constituents.
   Free-Float Market Cap = Free-Float Shares x Current Market Price (Excluding Promoter Holdings).

2. Step 2: Index value calculation

   
   The free-float market capitalisation of all constituents is aggregated to derive the index value.
   Index Value = (Current Free-Float Market Cap / Base Market Cap) x Base Value

3. Step 3: Weight Assignment

   
   Stocks are weighted based on free-float market capitalisation.

4. Step 4: Stock-Level Cap

   
   Each stock's weight is capped at 25% to avoid concentration.

5. Step 5: Adjustments & Continuity

   
   Corporate actions such as stock splits, bonus issues, and mergers are adjusted to maintain index continuity.

6. Step 6: Review & Rebalancing

   
   Quarterly rebalancing is conducted in March, June, September, and December.
   Changes take effect on the Monday following the third Friday.

Let us look at some benefits of investing in BSE PSU Bank stocks in India:

• Sector-Focused Exposure: Tracks only public sector banks within the banking industry.
• Government-Linked Institutions: Includes banks with government ownership and policy-driven roles.
• Defined Selection Framework: Uses clear industry and PSU classification filters.
• Free-Float Methodology: Considers only publicly tradable shares to reflect market participation.
• Controlled Weighting: Applies stock-level caps to reduce concentration risk.
• Benchmark Utility: Helps track PSU banking trends and monitor BSE PSU Bank share price movements.

With Anand Rathi's TradeMobi platform, investing in the BSE PSU Bank index is simple.

Here's how to get started:

1. Step 1: Open / Login to Your Account

   
   Start by logging into your account or opening a demat account and trading account.

2. Step 2: Explore Investment Options

   
   Look for sector mutual funds or stock baskets that track the BSE PSU Bank index.

3. Step 3: Choose Your Investment

   
   Pick a suitable investment option based on your understanding and risk levels.

4. Step 4: Invest and Track

   
   Once invested, you can monitor the BSE PSU Bank share price movements regularly.

5. Step 5: Stay Updated

   
   Use research insights available on the app to track banking sector and policy trends.

The BSE PSU Bank index was introduced on 1st January 2025 to track the performance of public sector banks in India.

It was created as part of BSE's sectoral indices to provide a focused benchmark for government-owned banking institutions within the broader financial sector.

The index reflects changes in the PSU banking space, including developments in credit growth, asset quality, and regulatory frameworks.

Also, to maintain accuracy, it is periodically reviewed to represent relevant PSU banks within the BSE universe.