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Market Capitalization In India

IndianMoney.com Research Team | Posted On Thursday, January 17,2019, 06:14 PM

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Market Capitalization In India

 

 

What is Market Capitalization?

Market Capitalization is the aggregate value of the company on the basis of its current share price and the total number of outstanding shares.

Market capitalization is a critical characteristic that facilitates investors to determine the returns and the risk behind investing in the company’s shares. It helps investors in choosing that stock which meets their risk and diversification criteria.

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Market Capitalization In India

Market Capitalization Formula

It is the product of current market price of the company's share and the total outstanding shares of the company.

Market Capitalization = market price of shares * number of outstanding shares

For instance, Company ABC has 2 Crore outstanding shares and the current market price of company’s share is Rs 100, then the Market capitalization of the company ABC is 2,00,00,000 * 100 = Rs 200 Crores.

Market Capitalization is the actual market value of the company. Market Capitalization is used by the investors to rank companies. It is also used in ranking the relative size of stock exchanges like NSE and BSE.

See Also: Capital Market Instruments

Indian Market Capitalization

In India, the companies are classified into three categories on the basis of their market capitalization.

Small Cap: Companies with Market Capitalization up to Rs 500 crores are classified as small cap.

Mid Cap: Companies with Market Capitalization between Rs 500 – 7,000 crores are classified as mid cap.

Large Cap: Companies with Market Capitalization between Rs 7,000 – 20,000 crores are classified as large cap.

Mega Cap: Companies with their Market Capitalization above Rs 20,000 crores fall under mega cap.

Below table shows the risk, returns, liquidity and information of company’s shares:

Parameter

Mega Cap

Large Cap

Mid Cap

Small Cap

Risk

Low

Low

High

Very High

High Returns

Low

Low

High

High

Liquidity

Very Good

Very Good

Good

Poor

Information

Very Good

Good

Poor

Bad

Table below shows the top ten Indian Companies in terms of Market Capitalization:

Company

Share Price

Market Capitalization (Rs in Cr)

Reliance

1,136.75

720,545.06

TCS

1,886.50

707,887.37

HDFC Bank

2,120.70

576,724.66

HUL

1,758.60

380,675.16

ITC

292.35

358,038.59

HDFC

1,991.00

342,346.73

Infosys

733.45

320,418.48

SBI

298

265,952.71

ICICI Bank

375.75

241,997.40

Kotak Mahindra Bank

1212.65

231,318.34

Reliance is the biggest company in terms of Market Capitalization. TCS is second on the list. TCS became a $100 billion company in April 2018. HDFC Bank, Hindustan Unilever, ITC, HDFC, Infosys, State Bank of India, ICICI Bank and Kotak Mahindra complete the list of top 10 Indian companies in terms of Market Capitalization

See Also: Features of Capital Market

Central Public Sector Enterprises (CPSEs) are the companies that have direct holding from the Central Government at 51% or more. There are 298 CPSEs out of which 63 are yet to start commercial operations. The table below shows the list of top 10 CPSEs:

Company

Number of Shares in Lakhs

Market Capitalization

OIL & NATURAL GAS CORP.LTD.

1,28,332.35

1,85,632.74

COAL INDIA LTD.

62,074.09

1,44,167.07

INDIAN OIL CORP.LTD.

97,118.10

1,27,418.95

NTPC LTD.

82,454.64

1,22,032.87

POWER GRID CORP.OF INDIA LTD.

52,315.90

1,01,675.95

GAIL (INDIA) LTD.

22,550.71

76,356.70

BHARAT PETROLEUM CORP.LTD.

21,692.53

73,168.90

HINDUSTAN PETROLEUM CORP.LTD.

15,238.23

35,581.27

CONTAINER CORP.OF INDIA LTD.

4,874.35

33,074.90

NMDC LTD.

31,638.90

29,171.07

Free Float Market Capitalization

Free float market capitalization is the value of the company, calculated by excluding the shares held by the promoters. For example if a company has issued 10 Lakh shares of face value Rs 10, but of these, four Lakh shares are owned by the promoter, then the free float market capitalization of the company is Rs 60 Lakh.  

Promoters of the company cannot hold more than 75% stake. Free Float Shares indicate the volatility/liquidity of shares. The Free Float Capitalization is considered as a better way of computing Market Capitalization as it depicts the reflection of actual market movements and stocks actively available for trading. Free Float Capitalization is lesser than Full Market Capitalization.

How to calculate market capitalization?

Free Float Market Capitalization = Share Price * number of shares issued

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