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The Technology orientation of the current economy has primarily marked a paradigm shift from manufacturing based activities to knowledge based activities. In the present economic scenario, tangible assets like land, plant & machinery are losing their significance to intangibles like intellectual property, knowledge base and technology. This has resulted in the dominance of emerging sectors like Information Technology, Media, & Telecom.

The bull run in the technology stocks in the last couple of years followed by the recent crash in valuations of technology stocks globally have kept investors equally fascinated. It is without doubt that the world is closely tracking the performance of the TMT sectors to infer future trends in the economy.

Going by the trading pattern, around 68% of the turnover on the stock exchanges is taking place in TMT sector stocks. These stocks collectively account for 23% of the total market capitalisation. The investment interest in technology stocks continues unabated.

Scrip selection criteria for BSE TECkIndex :

Eligible universe :
Scrips classified under information technology, media and telecom sectors that are present constituents of BSE-500 index would form the eligible universe.

Trading Frequency :
Scrips should have a minimum of 90% trading frequency in preceding six months.

Market Capitalisation :
Scrips with a minimum of 90% market capitalisation coverage in each sector based on free-float final rank will form the index.

Buffers :
A buffer of 2% both for inclusion and exclusion in the index is considered so that movements in and out of the index are minimized. Eg. A company can be included in the index only if it falls within 88% coverage and an existing index constituent cannot be excluded unless it falls above 92% coverage. However, the above buffer criterion is applied only after the minimum 90% market coverage is satisfied.


The TMT sectors have seen heightened activity in the last couple of years and the stock valuations of the companies in these sectors have witnessed unprecedented volatility. This led to a strong bull run in the TMT stocks in 1999 and early 2000. The market subsequently witnessed the most unexpected sell-off in the stocks of the TMT sectors which led to a huge market capitalisation erosion on the bourses and scared away genuine investors. It is felt that in the absence of a proper benchmark, the performance of the TMT sectors remained inadequately tracked. In order to fill this void, the BSE-TECk index is being positioned as a reliable index for benchmarking the performance of the TMT sectors.

The launch of BSE-TECk index can be justified on rational grounds which include inter-alia:

Globally a lot of investment is being committed to the TMT sectors. Even in India, the last 2 years have seen a lot of international and local money flowing into the TMT sectors.

The TMT sectors are currently dominating the trading pattern on the bourses worldwide. In India, the TMT sectors account for around 68% of the total daily turnover.

With a lot of domestic retail money committed to the TMT sectors and existence of many mutual funds dedicated to one or more of the TMT sectors in India, a need for a quality benchmark to track the performance of such funds has been long felt.

The global and domestic investment community monitors eagerly the performance of the TMT sectors to discern typical trends in the economy.

To provide a ready basket of quality TMT stocks for passive investors.

Reference for Index futures, options and other derivative products in times to come