Pragmatic Wealth Management (PWM) screens the universe of listed companies on the BSE (Bombay Stock Exchange)
and NSE (National Stock Exchange) for Shariah Compliance based on the Shariah Compliance Screening criteria. Each
stock from the Listed Universe is screened and the ITE Shariah Compliant Universe is derived. Although norms have
been made stricter, it’s an eye opener to notice almost 70% of the Sensex 30 and 65% of the Nifty 50 stocks are Shariah
Compliant. PWM, with the ITE-35 Index at the front line, aims to promote Shariah Compliant investments focusing on
equity involvement of the market participants, rather than a fixed interest based involvement. With almost 66% of
Large Cap, 63% and 28% of Small Cap stocks on the Indian Stock Market being “Shariah compliant”, the potential and
opportunity for growth in “Islamic Investment”, seems limitless.
Dividend Purification Ratio:
In certain cases revenue share from non-compliant businesses is permissible if they comply with the norms for threshold:
Income from Non-permissible Business activities / Revenue < 5%
This ratio is provided to investors for purification of income from dividends and is calculated as:
Dividends * (Non Permissible Revenue / Total Revenue)
(The Shariah board suggested to the investors to give their impure income as charity.