What is Market Capitalization? Meaning, India, Calculate

Market capitalization, commonly referred to as “market cap”, is a measure of a company’s total value and is calculated by multiplying the current stock price by the total number of outstanding shares. It is a key metric used by investors to assess the size and health of a company. Market capitalization can also be used to compare companies of different sizes and to measure the performance of a company’s stock over time.

The market capitalization of a company is an important indicator of its size and liquidity. Companies with higher market capitalizations tend to be more established and have more resources than smaller companies. As a result, they tend to be more stable and less volatile than their smaller counterparts.

Market capitalization is also an important measure of a company’s financial health. Companies with higher market capitalizations tend to be more profitable and have more access to capital. This can make them more attractive investments for investors.

For investors, market capitalization is an important metric to consider when evaluating a potential investment. Companies with higher market capitalizations tend to be more established and have more resources, making them less risky investments. Additionally, companies with higher market capitalizations tend to have more access to capital, making them more attractive investments.

In summary, market capitalization is an important measure of a company’s size and financial health. It is an important metric for investors to consider when evaluating potential investments. Companies with higher market capitalizations tend to be more established and have more resources, making them less risky investments.

What is Free Float Market Capitalization?

Free float market capitalization (FFMC) is a measure of a company’s market capitalization or the total value of its outstanding shares, that excludes any restricted or locked-in shares. This is different from the total market capitalization, which includes all shares, including those held by insiders, employees, and other stakeholders.

Calculating a company’s free float market capitalization is relatively straightforward. To begin, you’ll need to know the total number of outstanding shares and the current market price of the stock. Then, subtract the number of restricted or locked-in shares from the total number of outstanding shares. Finally, multiply the result by the current market price of the stock to get the free float market capitalization.

Example

if a company has 1 million shares outstanding and the current price per share is $10, then the market capitalization of the company would be $10 million. Market capitalization is important because it is used to compare companies of different sizes. For example, a company with a market capitalization of $10 million is much smaller than a company with a market capitalization of $100 million.

Market capitalization is also used to determine the value of a company. A company’s market capitalization is the total value of all of its outstanding shares. This means that if a company has 1 million shares outstanding and the current price per share is $10, then the total value of the company is $10 million.

How to Calculate With Formula

To calculate the market capitalization of a company in India, you must first determine the total number of outstanding shares. This can be done by looking at the company’s financial statements and checking the number of shares issued and outstanding. Once you have this number, you can then multiply it by the current market price per share. This will give you the total market capitalization of the company.

The formula for calculating Market Cap is:

Market Capitalization = Current Market Price per Share x Total Number of Shares Outstanding

Different Types

Market capitalization is used to classify companies into different categories. Companies are classified into large-cap, mid-cap, and small-cap, depending on their market capitalization. Large-cap companies have a market capitalization of Between 20,000 and 1,00,000 crores, mid-cap companies have a market capitalization of between Between 5,000 and 20,000 crores, and small-cap companies have a market capitalization Between 1,000 and 5,000 crores.

CategoryRange (in INR Crores)
Mega-capOver 1,00,000
Large-capBetween 20,000 and 1,00,000
Mid-capBetween 5,000 and 20,000
Small-capBetween 1,000 and 5,000
Micro-capUnder 1,000

Top Companies on the National Stock Exchange (NSE) in India

Company NameIndustryMarket Cap (in INR Crores)
1Reliance IndustriesConglomerate18,52,000
2TATA Consultancy ServicesInformation Technology13,11,000
3HDFC BankBanking and Finance8,55,000
4InfosysInformation Technology7,60,000
5Hindustan UnileverConsumer Goods5,20,000
6ICICI BankBanking and Finance4,91,000
7Kotak Mahindra BankBanking and Finance3,47,000
8Bharti AirtelTelecommunications3,25,000
9Housing Development Finance CorpHousing Finance2,86,000
10State Bank of IndiaBanking and Finance2,53,000
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