Market Capitalisation
The total market value of a company's outstanding shares, obtained by multiplying the share price by the number of shares.
Formula
Market Capitalisation = Market Price per Share x Total Shares Outstanding
Unit
₹ crore
In depth
Market capitalisation is how large a company is in the market's eyes, and it is the only sensible way to compare sizes — share price alone tells you nothing, because share count differs wildly between companies. It measures the equity claim only; to price the whole business you must add net debt, which is what enterprise value does. Market capitalisation moves every second the price moves, so it is a market opinion rather than a fact about the business. A frequent error is to call a ₹20 share 'cheap' and a ₹2,000 share 'expensive' when the two may be identical in size and valuation.
Worked example
Company A has 40 crore shares at ₹250: market capitalisation = 40 x 250 = ₹10,000 crore. Company B has 2 crore shares at ₹2,000: 2 x 2,000 = ₹4,000 crore. Company B has the far higher share price and is the far smaller company.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Market Capitalisation” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.