WHAT IS AN INDEX AND MARKET CAPITALIZATION? | குறியீட்டு மற்றும் சந்தை மூலதனம் என்றால் என்ன?

 

INDEX:

There are thousands of companies listed in the stock market, and more and more companies are getting listed every year. Hence it is almost impossible to monitor all those companies at a time. To make this tedious process simple, the stock market created the Indices. They serve as a report of the market's performance. The performance of a market is measured based on an index, which is a sample of stocks of a group of companies.

Example of Indices:- Nifty, Sensex, etc..

Sensex it the oldest market index compiled in 1986, it includes shares of 30 firms listed on BSE. 

Nifty Index founded in 1996, includes almost 50 shares listed on NSE.

Basically, it shows the state of the economy of the country in broad terms. It reflects the general amrket trends and also acts as a benchmark to find the performance of mutual funds and investors.

Indices are divided based on :

1. Type of Industry
2. Market Capitalization
3. Size of company
4. Price of stock
5. Other features, etc.

Some of the notable indices in India are as follows:

Based on Market Capitalization

• BSE Small cap

• NSE Midcap

Based on Sector/Industry

• BSE Bankex 

• Bank Nifty

Based on Broad Market

• BSE 500

• CNX 100

Based on Free Float Market Cap

• BSE Sensex

• CNX Nifty

MARKET CAPITALIZATION:

Market Capitalization is nothing but the actual worth of the company based on its current market price.

Market Capitalization = Total Number of Outstanding shares * Current Market price.

In case of a company has 5 lakhs of outstanding shares and the current share price of the company is ₹50, then the Market capitalization is calculated as:

Market Capitalization = 5,00,000 * 50 =  2,50,00,000 = 2.5 Crores.

According to the Market capitalization, the companies can be categorized under three categories:

1. Large Cap: Market capitalization > ₹20,000 Crores. (E.g. : Reliance Industries,TCS, etc. ).
2. Mid Cap: Market capitalization > ₹5,000 Crores. & < ₹20,000 Crores. (E.g. CDSL, IEX, etc).
3. Small Cap: Market capitalization < ₹5,000 Crores. (E.g. Reliance power, Hindustan Foods, etc).

Whenever the price of a stock changes in value, its weight changes in a market capitalization index.

Thus we have learnt about the Index and arket Capitalization in detail in this post. see you again with another interesting topic. 

DISCLAIMER:-

The content of this site is only for educational purpose. I am not SEBI Registered. The motive of this site is to share my knowledge on share market to new budding investors and others who are learning about stock market

My Kind request to my site viewers, Before taking any decision please do self analysis, consult or discuss with Your financial Advisor .

மறுப்பு:-

இந்த தளத்தின் உள்ளடக்கம் கல்வி நோக்கத்திற்காக மட்டுமே. நான் செபியில் பதிவு செய்யப்படவில்லை. இந்த தளத்தின் நோக்கம், பங்குச் சந்தையைப் பற்றிய எனது அறிவை புதிய வளரும் முதலீட்டாளர்கள் மற்றும் பங்குச் சந்தையைப் பற்றி அறிந்துகொள்ளும் மற்றவர்களுக்குப் பகிர்வதாகும்

எனது தள பார்வையாளர்களுக்கு எனது அன்பான வேண்டுகோள், எந்தவொரு முடிவையும் எடுப்பதற்கு முன், சுய பகுப்பாய்வு செய்யுங்கள், ஆலோசனை செய்யுங்கள் அல்லது உங்கள் நிதி ஆலோசகருடன் விவாதிக்கவும்.