What Is Market Capitalisation?
Market capitalisation shows the stock market’s perception of the value of a company. (Photographer: Carlos Muza on Unsplash)

What Is Market Capitalisation?

This is a series of explainers to educate and inform new investors. In association with Dun & Bradstreet India as knowledge partner.

Market Capitalisation: Definition, Meaning & Basics

Market capitalisation can be expressed as market price per share multiplied by number of shares issued by a company. It shows the stock market or investors’ perception of the value of a company.

Market capitalisation keeps on changing with every change in share price during the trading hours. The number of shares change rarely, only when a company decides to issuing additional shares via a rights issue, bonus issue, employee stock ownership plans, preferential allotment etc. Or when it may reduce the number of shares via say a buyback.

Stocks are classified into “large cap”, “mid cap” and “small cap” on the basis of market capitalisation. Some of the leading companies in India based on market capitalisation are Reliance Industries Ltd., Tata Consultancy Services Ltd., HDFC Bank Ltd., HDFC Ltd., etc.

Visit the Financial Terms section for more.

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