What is the Capitalisation and Free-float Capitalisation of the Company
EXPLAINING WITH AN EXAMPLE:
A.S. STEELS LTD
THE TOTAL NO OF SHARES IN THE COMPANY: 5 CRORE SHARES
PROMOTER HOLDING (STOCK) IN THE COMPANY: 3 CRORE SHARES
NON-PROMOTER HOLDING (FREE-FLOAT STOCK) IN THE COMPANY : 2 CRORE SHARES
FACE VALUE OF THE SHARE: Rs 10
MARKET VALUE OF THE SHARE : Rs 300
TOTAL SHARE CAPITAL OF THE COMPANY IS: Rs 10 * 5 CRORE SHARES = Rs 50 CRORES
TOTAL CAPITALISATION OF THE COMPANY IS: Rs 300 * 5 CRORE SHARES = Rs 1500 CRORES
TOTAL FREE- FLOAT CAPITALISATION (NON-PROMOTER CAPITALISATION) OF THE COMPANY IS : RS 300* 2 CRORE SHARES=Rs 600 CRORES
Here A.S. STEELS LTD has 5 crores shares in total, of which 3 crores are held by the promoters, so that only 2 crores shares are available for trading to the general public. These 2 crores shares are the so-called ‘free-floating’ shares/Non-promoters shares.
If the price of each share is Rs 300, then the ‘total’ market capitalization of the company is Rs 1500 crores (5 crores shares x Rs 300), but its free-float market capitalization is Rs 600 crores (2 crores shares x Rs 300).
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