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In terms of market valuation, the market value of 7 out of the top-10 companies in the country has increased by Rs 1.18 lakh crore in the business of last week. At the same time, the value of 3 has reduced by Rs 22,095 crore.
During this period, the highest value of SBI increased by Rs 35,953 crore to Rs 7.96 lakh crore. The value of Bharti Airtel has increased by ₹ 33,215 crore to Rs 11.19 lakh crore.
Reliance’s value increased by ₹ 17,389 crore
In terms of market cap, the value of Reliance Industries, the country’s largest company, increased by ₹ 17,389 crore to Rs 19.05 lakh crore. TCS value increased by Rs 12,953 crore to Rs 11.47 lakh crore.
Market value of ICICI Bank and Bajaj Finance decreased
Here, ICICI Bank shares were selling last week and its value has come down by ₹ 10,708 crore to ₹ 10.02 lakh crore.
During this period, the value of Bajaj Finance has come down by ₹ 6,347 crore to ₹ 6.18 lakh crore. At the same time, the value of Hul declined by ₹ 5,040 crore to ₹ 6.01 lakh crore.
The Sensex fell 388 points to close at 82,626 on Friday
On Friday, September 19, the Sensex fell 388 points to close at 82,626. The Nifty also declined by 97 points, it closed at 25,327 levels.
In today’s business, there was more purchase in government banks, pharma and realty shares. At the same time, auto, FMCG, media and IT shares were sold.
What is a market capitalization?
Market cap is the value of any company’s total outstanding stocks, ie all the shares that its shareholders currently have. Its calculation is done by multiplying the total number of issued shares of the company by their price.
Understand this with an example …
Suppose … People have purchased in 1 crore stock market of company ‘A’. If the price of a share is Rs 20, then the company’s market value will be Rs 1 crore x 20 or 20 crores.
The market value of companies increases due to increase in share prices or decreases. There are many other reasons for this …
1. What does the growth of market cap increase?
- Share price- Due to increase in demand of shares in the market, there is competition, due to which prices rise.
- Strong financial performance: The company attracts investors’ earnings, revenue, profits.
- Positive news or event-product launch, acquisition, new contract or regulatory approval increases demand for shares.
- Market Service- Bulish market trends or sector specific expectations such as IT sector estimate attracts investors.
- Issuing shares at high price: If a company issues new shares at high price, the market cap increases without decreasing the value.
2. What does the decreasing market cap mean?
- Decline in share price- Due to decrease in demand, the price of shares falls, it directly affects the market cap.
- Bad results- Investors sell shares due to decrease in earnings, losses or losses in a financial year or quarter.
- Negative News- Any negative news related to scandal, legal action, product failure or leadership reduces investment.
- Economy or market decline- Recession, increase in interest rates and below can drop market shares.
- Share buyback or delisting: If a company purchases shares back or becomes private, the number of outstanding shares decreases.
- Industry Challenge: Demand for shares decreases due to regulatory change, technological disorder or declining demand for a sector.
3. What is the impact on the company and investors on market cap fluctuations?
Effect on the company: The big market cap helps the company to raise funds from the market, take loans or to acquire other companies. At the same time, small or low market cap reduces the company’s ability to take financial decisions.
Effect on investors: Increasing market cap provides direct benefits to investors. Because the price of their shares increases. The same, the decline can cause damage, allowing investors to decide to sell shares.
Example: If the TCS market cap increases with ₹ 12.43 lakh crore, then investors’ assets will increase, and the company can get more capital for future investment. But if the market cap falls, it can be damaged.
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