BSE oil and gas index has continuously outperformed BSE Sensex in the past one year, registering a growth of 67% compared to around 37% growth registered by the Sensex in the same period. The outperformance of the sectoral index is largely due to the rise in the market value of index heavyweight
Reliance Industries (RIL). The company has nearly two-third weightage in the index. This means, for every 10% rise in RIL stock prices, BSE oil & gas index rises by 6.4% and in last one year, RIL stock has more than doubled. Reliance Petroleum, another Mukesh Ambani group company, accounts for another 5.5% of BSE oil & gas index. The stock has more than doubled in past 12 months contributing to the rise in the sectoral index. Interestingly, RPL is 75% owned by RIL and a rise in former leads to corresponding appreciation in the latter.
Cairn India — the latest addition to BSE oil and gas index — grew 35.3% since its listing on January 9, 2007, outperforming the Sensex, which has risen by over a quarter during the period. However, the growth in the oil and gas index has not been broadbased with most other counters grossly underperforming. PSU oil marketing companies — IOC, BPCL and HPCL — have witnessed a fall in their market cap ranging 8-15% over last one year.
ONGC, with a weightage of 15.3%, witnessed just 18.5% appreciation in its market capitalisation during the past 12 months while Gail India too underperformed with 33.9% growth.
