There was a decline in the Indian stock market last week. Meanwhile, the market cap of 4 out of the 10 most valuable companies of the country has declined by a total of ₹ 87,960 crore. During this period, the market valuation of Bharti Airtel, a major company in the telecom sector, saw the biggest decline of ₹ 28,052.96 crore. Its valuation has come down to ₹12.15 lakh crore. Apart from Airtel, the market cap of Tata Consultancy Services, State Bank of India and Hindustan Unilever has also decreased. Whereas the market value of 6 companies – LIC, Reliance Industries, Larsen & Toubro, Bajaj Finance, ICICI Bank and HDFC Bank has increased. Last week, Sensex closed down by 468.42 points (0.60%) and NSE Nifty closed down by 114 points (0.46%). What is market capitalization? Market cap is the value of the total outstanding shares of any company, i.e. all those shares which are currently held by its shareholders. It is calculated by multiplying the total number of issued shares of the company by their price. Understand this with an example… Suppose… people have bought 1 crore shares of company ‘A’ in the market. If the price of one share is Rs 20, then the market value of the company will be Rs 1 crore x 20 i.e. Rs 20 crore. The market value of companies increases or decreases due to increase or decrease in share prices. There are many other reasons for this… What effect does market cap fluctuations have on the company and investors? Impact on the company: Large market cap helps the company to raise funds from the market, take loans or acquire other companies. At the same time, small or low market cap reduces the company’s ability to take financial decisions. Impact on investors: Investors get direct benefit from increasing market cap. Because the price of their shares increases. At the same time, the fall may result in loss, due to which investors may decide to sell shares. Example: If TCS’s market cap increases by ₹12.43 lakh crore, investors’ wealth will increase, and the company may get more capital for future investments. But if the market cap falls, it may incur losses.
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Market-cap of 4 companies in top-10 decreased by ₹ 87,960 crore: Airtel top loser, value decreased by ₹ 28,052 crore; Value of LIC increased
