BSE has categorized its stocks into different groups, namely A, M, T, Z, and B for effective execution of trades. Group A represents companies that have high liquidity and are traded actively on the exchange. You should also know that all the trades of securities falling under this group will be settled as per the normal rolling settlement process. Now that we know the features of this group, let’s discuss the guidelines that if fulfilled, the company will fall under this group.
Group A selection criteria
1. The company must have been listed on the exchange for a minimum of 3 months. Exceptions to this rule are:
1.1 If a company is permitted to trade in the F&O segment from the date of its listing
1.2 If a company is listed subsequent to any corporate action that involves merger, demerger, capital restructuring, etc.
2. The company must have traded for at least 98% of the trading days in the last quarter
3. The company has passed the screening for investigation & compliance by the Department of Surveillance & Supervision (DOSS) but the companies with the negative investigation will be considered ineligible
The scoring mechanism to select companies of Group A
| Category | Weightage (in %) |
| Last quarter average free-float market capitalization of the company | 50 |
| Last quarter average turnover of the company | 25 |
| Corporate governance (Source of information – latest annual report submitted by the company) | 10 |
| Compliance monitoring | 10 |
| Responsible/Sustainable investment (Source of information – latest annual report submitted by the company) | 5 |
Hierarchy of selection of companies in Group A
1. Companies that were among the top 350+ companies’ list continuously for the last 3 quarters
2. If the number of companies is less than 350+ mentioned in point (a), companies that were in the top 350+ for the last 2 quarters are considered
3. In case companies are less than 350+ as per the list derived from points (a) and (b) above, then companies that are currently ranked among the top 350+ are included
4. Companies that are a part of the S&P BSE 500 but not in the final top 350+ will continue to be a part of this group
*Please note that the number of companies in group A may vary from the number mentioned above.
Conclusion
As of 19th November 2021, some companies that have fulfilled group A criteria are Bajaj Finserv, Tech Mahindra, HDFC, Bharti Airtel, Titan, Kotak Bank, etc. The companies of this group are highly liquid with high trading volume. Take your pick from the list of Group A companies as on BSE and start investing.
