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In terms of market valuation, the market value of 5 of the top-10 companies in the country has increased by Rs 60,677 crore in this week’s business. At the same time, the value of 5 has reduced by Rs 39,610 crore.
During this period, the value of the government bank SBI has increased by Rs 20,446 crore to Rs 7.63 lakh crore and HDFC value has increased from ₹ 14,084 crore to ₹ 15.28 lakh crore.
LIC value decreased by ₹ 15,307 crore to ₹ 5.62 lakh crore
Here, this time the shares of Life Insurance Corporation of India LIC were selling and its value has come down by ₹ 15,307 crore to ₹ 5.62 lakh crore. During this period, the value of Bajaj Finance has come down by Rs 9,601 crore to ₹ 5.36 lakh crore.
The market was closed on Thursday by climbing 58 points
On Thursday, August 14, the stock market was boom on the last trading day of this week. The Sensex closed at 80,598 with a gain of 58 points. The Nifty rose by 12 points, closed at 24,631.
Of the 30 shares of the Sensex, 13 are rose and 17 declines. Shares of Jomato, Infosys and Asian Paints rose. Tata Steel, Tech Mahindra, Adani Ports and BEL declined.
Of the 50 shares of Nifty, 21 rose and 29 declined. NSE metal, realty and oil and gas index fell. At the same time, IT, pharma, banking and consumer durables climbed and closed.
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- Increased demand for shares in the market leads to competition, due to which prices rise.
- Strong Financial Performance: The company attracts investors in things like 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 a high price, the market cap increases without decreasing the value.
2. What does the decreasing market cap mean?
- Decline in share price- Due to lack of 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, interest rates increase and bearish 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: The 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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