Mumbai4 minutes ago
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The value of 8 of the country’s 10 largest companies in terms of market capitalization increased by Rs 1,94,149 crore in this week’s trading. Tata Consultancy Services (TCS) was the top gainer during this period. The value of the company has increased by ₹45,678 crore to ₹10.96 lakh crore.
At the same time, due to selling, Hindustan Unilever Limited fell by Rs 3,571 crore to Rs 5.94 lakh crore and the market cap of Life Insurance Corporation of India (LIC) fell by Rs 4,649 crore to Rs 5.68 lakh crore during this period.
There was a rise of 328 points in the market yesterday
There was a rise in the stock market yesterday i.e. Friday, October 10. Sensex closed at 82,501, up 328 points. Nifty also gained 103 points and closed at the level of 25,285. Out of 30 Sensex stocks, 22 rose and 8 declined. The biggest rise was seen in the shares of PSU bank, realty and pharma sector. The Sensex closed with a rise of 1,294 points in the week’s trading.
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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