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What is Market Capitalisation?

Learn more about important trading and financial terms here. Need more help? Our team is ready.

Market capitalisation (or market cap) is the total market value of a company’s outstanding equity shares. Mathematically, it is calculated using the following formula:

  • Market Capitalisation = Current Share Price × Total Outstanding Shares

For example, suppose a company has 10 crore outstanding shares and its share price is ₹200. Now, its market capitalisation is ₹2,000 crore (10 crore shares × ₹200 per share).

Note that market capitalisation is used to classify companies into broad groups such as large-cap, mid-cap, and small-cap in India. 

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