Sensex is a value-weighted index and is calculated based on a free-float capitalization method. This is a variation from the earlier market capitalization method, as instead of using a company’s all outstanding shares, only the shares that are readily available for trading are used. The free-float method, therefore, does not include restricted stocks, such as those held by promoters, government and institutional investors. This method was introduced in Indian Bombay Stock Exchange w.e.f September 1, 2003, to serve as a true indicator of market sentiments. The calculation of SENSEX involves dividing the free-float market capitalization of 30 companies in the Index by a number called the Index Divisor. The Divisor is the only link to the original base period value of the SENSEX. It keeps the Index comparable over time and is the adjustment point for all Index adjustments arising out of corporate actions, replacement of scrips etc.