Mumbai14 minutes ago
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In terms of market valuation, 8 out of the 10 largest companies in the country have reduced Rs 2.25 lakh crore in this week’s business. The biggest decline in this has been Rs 70,707 crore in Reliance Industries (RIL).
Now the market cap of the company has come to ₹ 18.36 lakh crore. Apart from RIL, HDFC Bank’s value has been reduced by ₹ 47,483 crore, ikici bank’s ₹ 27,135 crore and Airtel’s ₹ 24,947 crore has been reduced.
At the same time, during this period, the value of Tata Consultancy Services (TCS) has increased by ₹ 11,126 crore to ₹ 11.16 lakh crore and the value of Hindustan Unilever (HUL) has increased by ₹ 7,319 crore to ₹ 6.25 lakh crore.
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 …
| What to grow | What does it mean to decrease |
| Increase in share price | Decline in share price |
| Strong financial performance | Bad results |
| Positive news or event | Negative news or event |
| Positive market sentiments | Economy or market decline |
| Issue of shares at high price | Shares buyback or delisting |
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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