There was a decline in the Indian stock market last week. Meanwhile, the market cap of 5 of the 10 most valuable companies of the country has overall declined by about Rs 1 lakh crore. During this period, the market valuation of IT sector giant Tata Consultancy Services (TCS) saw the biggest decline of ₹ 34,263 crore. Sensex closed 489.92 points (0.62%) lower during the week’s trading sessions. On the other hand, the Nifty index of the National Stock Exchange also slipped by 204.65 points (0.83%). Losses to 5 big companies, TCS and Reliance top losers During the week, the market valuations of Reliance Industries, HDFC Bank, ICICI Bank, State Bank of India (SBI) and TCS declined. The value of 5 companies including LIC increased by a total of ₹ 55,149 crore. Despite market pressure, shares of Bharti Airtel, Bajaj Finance, Larsen & Toubro (LT), LIC and Hindustan Unilever showed strength. These 5 companies together have added ₹55,149.45 crore to their market value. 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 a 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 ability of the company 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 cause losses, 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.
Source link
[ad_3]
Market-cap of 5 companies in top-10 decreased by ₹ 1 lakh crore: TCS top loser, value decreased by ₹ 34,263 crore; Value of LIC increased
