What is Market Capitalization

What is Market Capitalization ?? (or) 3 Market Caps ?? Explained

What is Market Capitalization ?? (or) 3 Market Caps ?? Explained

Market Capitalization refers to the total number of outstanding shares of a company in the market multiplied by the current price of each share.It is a measure of the estimated valuation of a company.

Market capitalization is the valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by multiplying the current market price of the company’s share with the total outstanding shares of the company.

Market capitalization is one of the most important characteristics that helps the investor determine the returns and the risk in the share. It also helps the investors choose the stock that can meet their risk and diversification criteria

To make things simpler, let us consider the meaning of market capitalization with the help of an example.

For Example, that (TheFactsGENIE) Company has 20,000 outstanding shares in the market and each share of (TheFactsGENIE) Company is priced at Rs 20.

 Then, the Market Capitalization of (TheFactsGENIE) Company will be calculated as follows Outstanding shares x price per share

20,000 x 20 = Rs 4,00,000

Therefore, the market capitalization of (TheFactsGENIE) Company is Rs 4,00,000.

The companies that are traded on the stock exchanges can be categorized into three broad categories





1)Large-Cap companies are businesses that are well-established and have a significant market share. Large-cap companies have market caps of Rs 10,000 crores or more
2)Mid-Cap companies are companies whose market cap is above Rs 500 crores but less than Rs 10,000 crores. Investing in these companies can be riskier than investing in large-cap market companies.
3)Small-Cap companies are those that have a market capitalization of less than Rs 500 crores. These companies are relatively smaller in size and have significant growth potential.
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Nagendra Prasad Krishnam

Mr. Nagendra Prasad, MBA, M.Phil., PhD, has vast experience and expertise in the field of Business Management, Learning & Development, Training, Classroom Training, Virtual Training, Research & Development, Academic Content, and Training Content at Various Organizations, Academic Institutions and Expertise in Research Data Analysis including Primary Data and Secondary Data

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