Market capitalisation, or market cap, is the total value the market places on a company's shares all together. It answers a simple question: if you could buy every share at the current price, what would the whole company cost?
Market capitalisation = Share price × Shares outstanding
Shares outstanding = all the shares the company has issued that are held by investors.
Suppose a fictional company, Meridian Tools Ltd, has 2 crore shares outstanding and each share trades at ₹150. Its market cap is 2 crore × ₹150 = ₹300 crore. That single number is far more useful than the share price alone.
A high share price is not the same as a big company
Share price by itself tells you almost nothing about size. A company with a ₹5,000 share price but only 1 lakh shares outstanding is worth ₹50 crore, while a company with a ₹20 share price and 50 crore shares is worth ₹1,000 crore. The price tag depends on both numbers, not just one.
| Company (fictional) | Share price | Shares outstanding | Market cap |
|---|---|---|---|
| Meridian Tools Ltd | ₹150 | 2,00,00,000 | ₹300 crore |
| Blue Harbour Foods Ltd | ₹5,000 | 1,00,000 | ₹50 crore |
| Nova Retail Ltd | ₹20 | 50,00,00,000 | ₹1,000 crore |
Same market, three very different sizes — note how the ₹5,000 share is the smallest company of the three.
Market Capitalisation Calculator
See how share price and the number of shares combine into the size of a company.
Market Cap
₹5,000 Cr
Size band: Mid-cap
A price tag, not a verdict