As yesterday I was sharing views over market capitalization. Let's understand about the same with some elaborative example. | Arshnoor Singh

As yesterday I was sharing views over market capitalization. Let's understand about the same with some elaborative example. But before that the stock prices of two famous Indian companies are given below. What do you think? Which company is bigger? MRF= Rs 69,780 HDFC Bank= Rs 1,650

If you think that MRF is a bigger company as its share price is too big compared to HDFC bank, then you need to read this post completely. This is because you’re completely wrong. You cannot judge the size of the company just by looking at its share price.

So let's understand how is HDFC bigger then MRF. For that we have to just concentrate on the formula which I shared yesterday. Market Capitalization = (Total no of outstanding share) * (Price of one share)

MRF v/s HDFC Total number of outstanding shares = 42,41,143 2,70,95,42,308 Current market price of one share = 69,780 1650 Market Capitalization (in crores) = 29,635 4,30,532 From above we can notice that the market capitalization of HDFC bank is around 15 times that of MRF.

Hence, HDFC bank is a much bigger company than MRF.