market capitalization stock market


Friends, today we will talk about the market capitalization of any company.  What is market capitalization, what are its effects on the stock market, how to calculate it, etc?

 Market capitalization is called a market cap.

market capitalization moneycontrol

 What is market capitalization?

 Market cap shows the total value of any company, from the market cap we can understand which company is how big or how small.

 Usually, new investors understand by looking at the shares of the company listed in the stock market, which company is big or small, in this way it is completely wrong to understand the value of a company.

 Example - If the share price of a company is Rs 500, then we cannot say that this company is big, and if the share price of a company is Rs 50, then we cannot say that this company is small.

We can say that by comparing the market cap of a company, it can be understood that how big or how small a company is,

 The second thing is that it is very important to understand the market cap that the change in the price of a company's share directly affects the market cap of that company.

 Market cap calculation

 If the total share of the company is one lakh, and the share price is Rs 50, then the market cap of that company is 50 lakh.

 market cap = total share X share price

 market cap = 100000 X 50 = 5000000

 If someday the share price of that company increases from Rs 50 to Rs 60, then the market cap of that company will increase by Rs 10 to 60 lakhs, this is the effect.

 market cap = 100000 X 60 = 6000000

 What is an outstanding share?

 Outstanding share means all those shares which are issued by the company, and which are available for trading on the stock exchange, as well as promoters, investors, restricted shares, all these shares, are called outstanding shares, which are owned by the company.  Haven't repurchased.

What is a Free-float market cap?

 Free float market cap means when to calculate the market cap, only those shares are taken into account, which are available for trade in the stock market.

 free float market cap = no of tradeable shares X current price of a share

 No.  of trade-able shares Its number is available on the website of BSE and NSE, trade-able shares the shares held by the shareholders and promoters of the company are not added.

 The company's free float market cap is used in the calculation of NSE index Nifty and BSE index Sensex.

 I hope you have understood about market cap, if you like this post, then do share and comment. Thank you

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