The BSE 500 Index, which once accounted for about 96% of the combined market value of companies listed on the BSE, now represents just 85%, according to data compiled by Bloomberg. The decline highlights how India’s equity market has broadened beyond its largest companies, with a growing share of market value now being captured by stocks outside the BSE 500.
The BSE 500, which spans 20 major industries and represents a broad cross-section of the Indian economy, has also underperformed. The index is down about 9% from its September 2024 peak. More recently, it has fallen 5.6% so far this year, compared with a 13.3% gain in the BSE SmallCap Index.
The widening gap has been driven not only by relative performance but also by the rapid expansion of the listed universe. A steady stream of IPOs has added companies with substantial market capitalisations, many of which remain outside the BSE 500 until they meet the index’s eligibility and ranking criteria.
As of Friday’s close, companies listed on the BSE had a combined market capitalisation of about ₹482 lakh crore, compared with roughly ₹412 lakh crore for the BSE 500. The recent listing of the National Stock Exchange has further expanded the market, with NSE commanding a market value of about ₹4.4 lakh crore.
Around 230 companies, including mainboard and SME listings, have debuted in 2026 so far, collectively commanding about ₹12.5 lakh crore in market capitalisation. NSE is the largest, followed by SBI Funds Management and Manipal Health Enterprises, each with a market value of around ₹1 lakh crore.
Investor expectations of stronger growth from mid- and small-cap companies have also contributed to the shift in market leadership.“Large-cap earnings are growing at around 8-9%, which is lower than the growth being seen in the mid- and small-cap segments,” said Rajiv Batra, Head of Asia and Co-Head of Global Emerging Markets Equity Strategy at JPMorgan.
The divergence is reflected in this year’s performance. While the BSE SmallCap Index has gained 13.3%, the BSE 500 has declined 5.6%, while the benchmark Sensex has fallen 13.3%.