Market Capitalisation

Detailed explanation

Market cap is share price multiplied by the number of shares outstanding. It is the standard way to size a company and to sort the market into large, mid and small cap segments, which in India are defined by SEBI's ranking of the top 100, next 150 and the rest.

Formula

Market cap = Share price × Shares outstanding

Example

A company with 20 crore shares trading at ₹450 has a market cap of ₹9,000 crore.

Why it matters

Segment drives risk. Small caps can compound faster but fall harder and are far less liquid in a panic.

Key points

• Price alone says nothing about company size.
• SEBI ranks the top 100 as large cap, 101–250 as mid cap, 251 onward as small cap.
• Free-float market cap, not total, drives index weights.

Related terms

More in Stock Market