Global index provider Standard & Poor's launched on Wednesday an index of 10 Indian stocks to provide foreign investors an exposure to the domestic market.
The 'S&P India 10 index' comprises stocks of largest and most liquid Indian firms, including IT bellweather Infosys Technologies, private sector lenders -- ICICI Bank and HDFC Bank and copper producer Sterlite Industries.
"India has ranked among the fastest-growing emerging market economies in recent years, but foreign ownership restrictions have made it difficult for international investors to gain exposure to its burgeoning equity market.
The 'S&P India 10 index' is designed to address this accessibility challenge. It offers investors liquidity and investability, and can also serve as a basis upon which to create investment products," Vice President of Portfolio Services for S&P Steven Goldin said.
On the basis of float adjusted market cap, the top five companies in the index are I
nfosys Technologies, ICICI Bank, HDFC Bank, Sterlite Industries India (American Depository Receipt)
and Satyam Computer Services.
To be eligible for inclusion in the index, stocks should have a float-adjusted market capitalisation above $500 million at each annual rebalancing and a six-month average daily trading value above $1 million.
According to S&P statement, net foreign investment into the country has increased four-fold since 1998. Both exports and fixed investment have been accelerating at an average annual rate of 24.2 per cent and 15.7 per cent, respectively, since 2003, it added.
Earlier this month, the index provider had launched Indian Rupee Index and Chinese Renminbi Index, which would provide global investors an exposure to the two emerging economic giants.