The S&P CNX Nifty on Friday gained an additional 15 points on account of its shift to the free-float market capitalisation methodology for calculating weights in the index.

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The free-float Nifty on Friday closed at 4,375.50, while it should have actually ended the day at 4,360.36 had the full market capitalisation weighted method been used. This difference of 15.14 points came to the fore following a BS Research Bureau calculation.

The National Stock Exchange (NSE) adopted the free-float methodology to calculate the benchmark S&P CNX Nifty from on Friday. Under this method, 24 index components witnessed a 22.99 per cent fall in their weight, thereby contributing 989 points less to the index. The weights of the remaining 26 index components, however, increased by 22.99 per cent and together they contributed 1,004 points more to the Nifty.

Larsen & Toubro (L&T) and ICICI Bank, which have 100 per cent free-float market capitalisation, saw their weights in the Nifty increase from 6.34 per cent to 14.27 per cent and, as a result, their contribution to the index increased by 371.52 points. Infosys Technologies (+154.13 points) and HDFC (+114.20 points) have also increased their contribution to the index.

However, Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC) have been among the major losers in the free-float method. Under the new method, the weights of these two index components dropped from 14.31 per cent to 4.39 per cent. No wonder, their contribution to the index declined by 424.75 points from the Thursday level.

In the full market capitalisation weighted method, the level of an index reflects the total market value of all the stocks in the index relative to a particular base period. But in the free-float market capitalisation method, the level reflects the total float-adjusted market value of all the component stocks relative to a particular base period.

The free-float factor (investible weight factor) for each company in the index is determined on the basis of public shareholding in these companies as disclosed in the shareholding pattern submitted to various stock exchanges

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