What is Market Capitalisation

It is the total market price of a company at a given time.

It indicates the current value of the company and will fluctuate every second as per the demand and supply. It is also known as companies current worth (*not net worth).

How to calculate

No. of shares x market price per share

Eg. Face value =Rs. 2 and market value =Rs. 1000. Then the share is said to be trading at a premium of Rs. 998.

and total shares are 2000 then the market cap is of Rs. 2000 shares x 1000 market value = 20 lacs.

There are 3 slabs for market capitalization:-

  1. Large Cap:- Companies that have a market cap higher than 10,000 crores. Market cap > Rs. 10,000 cr.
  2. Mid Cap:- Companies that have a market cap of Rs. 500 crores to 10000 crores.
  3. Small Cap:- Companies that have a market cap lesser than 500 crores. Market cap < Rs. 500 cr.

The above criteria will change from time to time. So don’t get confused if you see something else on Google because the norms keep changing but this is the latest one.

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