AS Chakravarthy : What is the Capitalization & Free-float Capitalization?

NCFM Classes in Hyderabad: Capitalisation & Free float capitalisation

NCFM COURSE TRAINING IN HYDERABAD: Company Capitalisation

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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Keywords: Free float Capitalisation, Total Capitalization, Stock Market, NCFM Classes in Hyderabad, NCFM Course training in Hyderabad.

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