Market capitalisation is the market value assigned to a company's equity. It is more useful for comparing company size than share price alone.
Formula
Market cap is broadly share price multiplied by shares outstanding. Free-float measures consider shares available for public trading.
Why share price misleads
A ₹5,000 stock is not automatically larger than a ₹500 stock. The number of shares outstanding changes the total equity value.
Using market cap
Market cap helps compare companies, build screens and understand liquidity, but it does not tell you whether a stock is cheap or expensive.
Indian context
Index and fund classifications can use prescribed market-cap methodologies. Check the relevant methodology rather than assuming a universal cutoff.
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