Mumbai6 hours ago
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Market cap is the value of any company's total outstanding stocks, ie all the shares that its shareholders currently have.
In terms of market valuation, 9 out of the top-10 companies in the country have increased by Rs 2,34,565.53 crore (₹ 2.35 million) in this week's business. During this, Reliance was the top gainer. The company's market cap has increased ₹ 69,557 crore to ₹ 20.52 lakh crore.
During this period, the value of telecom company Airtel has increased by Rs 51,861 crore to ₹ 11.56 lakh crore. The value of HDFC Bank has also increased by ₹ 37,343 crore, Bajaj Finance ₹ 26,038 crore and ICICI Bank value has increased by ₹ 24,650 crore.
At the same time, Infosys was the only company in which net selling was seen this week and its market cap has come down by ₹ 5,495 crore to ₹ 6.68 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 …
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.
4. How does the market cap use?
- The market cap is used to catarise the shares of companies, so that investors will help in choosing them according to their risk profiles. Such as large cap, mid cap and small cap companies.
- Whether or not a company will get a profit in shares, it is estimated by looking at many factors. One of these factor is also a market cap. Investors can find out how big the company is by looking at the market cap.
- The higher the market cap of the company, the better it is considered to be a good company. According to demand and supply, stock prices rise and decrease. Therefore, the market cap is the public's public percevad value.
Market closed beyond 84,050 on Friday, climbing 303 points
The Sensex climbed 303 points to close at 84,059 on the last trading day of the week i.e. Friday, June 27. The Nifty also rose by 89 points, reaching 25,638.
The Sensex declined 16 out of 30 shares and a decline in 14. Asian Paints shares climbed 3.1%. At the same time, a total of 11 shares including UltraTech cement and power grid rose by more than 1%. The shares of Axis Bank and Eternal fell 1%.
Out of 50 shares of Nifty, 30 rose and 20 declined. The NSE oil and gas sector was the highest at 1.19%. Pharma, metal and healthcare also closed up. Realty fell by 1.55%.
