Mumbai36 minutes ago
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The value of 7 of the country’s 10 largest companies in terms of market cap declined by Rs 1.75 lakh crore in last week’s trading. This decline has occurred due to tension in the Middle East and Israel-Iran war.
During this period the value of Reliance Industries decreased the most. Reliance’s market cap declined by Rs 89,720 crore to Rs 18.24 lakh crore.
HDFC’s market cap declined by Rs 37,248 crore to Rs 11.64 lakh crore. Whereas the market value of SBI declined by ₹35,399 crore to ₹9.41 lakh crore.
Apart from these, the market cap of ICICI Bank, Bharti Airtel, HUL and TCS has also decreased last week. Whereas the market cap of Larsen & Toubro, Bajaj Finance and Infosys has increased.
Last week Sensex and Nifty fell by 1.27%
Last week, Sensex had fallen 949.74 (1.27%) and Nifty 294.9 (1.27%) points amid the US-Israel and Iran war. There was a decline in the stock market on Friday, March 27.
Sensex fell by 1690 points (2.25%) to 73,583. At the same time, Nifty also declined by 486 points (2.09%), it closed at 22,820.
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 does it mean to grow | what does decrease mean |
| increase in share price | decline in share price |
| strong financial performance | bad results |
| positive news or event | Negative news or event |
| positive market sentiment | Economy or market decline |
| Issuing shares at high price | Share buyback or delisting |
What effect do market cap fluctuations have on the company and investors?
Impact on the company: A 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 directly 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 grows 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 then it may incur losses.
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