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In terms of market valuation, the market value of 8 of the top-10 companies in the country has increased by Rs 1.69 lakh crore in the last week’s business. At the same time, the value of 2 has been reduced by Rs 13,883 crore.
During this period, the highest value of Bajaj Finance increased by Rs 40,788.38 crore to Rs 6.24 lakh crore. Infosys value has increased by ₹ 33,736.83 crore to Rs 6.33 lakh crore.
TCS value increased by ₹ 30,970 crore
TCS value increased ₹ 30,970.83 crore to 11.33 lakh crore rupees. At the same time, the value of Reliance Industries, the country’s largest company in terms of market cap, increased by Rs 27,741.57 crore to Rs 18.87 lakh crore.
Hul and LIC’s market value decreased
Here, HUL shares were selling last week and its value has come down to ₹ 12,429.34 crore to ₹ 6.06 lakh crore. During this period, the value of LIC has come down to ₹ 1,454.75 crore to ₹ 5.53 lakh crore.
The Sensex gained 355 points on Friday
The stock market was gaining momentum on Friday i.e. 12 September. The Sensex climbed 355 points to close at 81,904 levels. At the same time, the Nifty also rose by about 108 points. It closed at 25,114 levels.
19 out of 30 shares of Sensex declined and 11 declined. Financial services, metal, pharma, auto and IT shares were seen to be a faster.
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- The recession, increase in interest rates and below 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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