Description

BSE Index Services updates the fast-track inclusion criteria for IPOs and spin-offs in BSE AllCap and related indices, effective December 2, 2025.

Summary

BSE Index Services Private Ltd has announced changes to the methodology for fast-track inclusion of IPOs and spin-offs in BSE AllCap and related Size and Sector Indices. The revised criteria expand eligibility from top 10 to top 200 companies based on market capitalization and introduce a new monthly review schedule. Changes are effective December 2, 2025.

Key Points

  • Fast-track IPO inclusion criteria expanded from top 10 to top 200 companies by average total market capitalization
  • New monthly evaluation window introduced for companies listed between Monday after 3rd Friday of T-2 month until 3rd Friday of T-1 month
  • Data points considered for one-month period ending 3rd Friday of current month
  • Eligible companies added at market open on Tuesday following first Monday of each month
  • All existing eligibility criteria under “Eligibility Criteria and Index Construction” must still be satisfied
  • Applies to BSE AllCap and related Size Indices and Sector Indices

Regulatory Changes

Previous Methodology:

  • Fast-tracked IPOs required ranking among top 10 companies based on one-month average daily total market capitalization
  • Companies added with five days’ notice to clients

New Methodology:

  • Fast-track inclusion requires ranking among top 200 companies based on average total market capitalization
  • Structured monthly review cycle with specific eligibility window
  • Companies listed between Monday following 3rd Friday of T-2 month until 3rd Friday of T-1 month evaluated for eligibility
  • Index additions occur at market open on Tuesday following first Monday of each month

Compliance Requirements

  • Index users and market participants should prepare for the new methodology effective December 2, 2025
  • Portfolio managers and index fund managers need to adjust rebalancing schedules to align with new monthly addition timing
  • For queries, stakeholders should contact bseindex@bseindia.com

Important Dates

  • Notice Date: October 29, 2025
  • Effective Date: December 2, 2025
  • Index Addition Schedule: Market open on Tuesday following first Monday of each month (ongoing)

Impact Assessment

Market Impact:

  • Broader pool of newly listed companies (top 200 vs top 10) can qualify for fast-track inclusion, potentially increasing index turnover
  • More predictable inclusion schedule with monthly additions provides better visibility for passive fund managers
  • One-month evaluation period (vs previous criteria) may result in slightly delayed inclusions but more stable selection

Operational Impact:

  • Index fund managers will need to adjust tracking procedures to accommodate expanded eligibility universe
  • Monthly addition cycle provides structured rebalancing schedule versus ad-hoc five-day notice period
  • Enhanced accessibility for mid-sized IPOs and spin-offs to enter major BSE indices

Impact Justification

Methodology change affects index composition and IPO inclusion criteria but applies systematically rather than to specific stocks immediately