QnA

Does Market Cap change everyday?

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This is a frequently asked question:

Does Market Cap change everyday?

Market Cap changes when the price of the stock changes, which happens frequently when the market is open.

The formula for Market cap is simple:

Current price of the stock x Number of Shares of the company = Market Cap

To see how the market cap changes everyday, let’s take the example of Kajaria Ceramics.

  • Current Market Price = 314.90
  • Market Capitalisation = 5005.34 crore
  • Total Number of Shares = 15,89,50,300

Note: ‘Total Number of Shares’ can be calculated by dividing ‘market capitalisation’ by ‘current market price’ of the share.

When the market is open, if the price of Kajaria Ceramics increases by just 10 paisa – i.e from 314.90 to 315.00, the market cap will change.

15,89,50,300 (Total Shares) x 315 (Current Market Price) = 5006.93 crore.

Notice how the market cap increased by nearly 1.6 crore when the price of the share increased by just 10 paisa.

To make it simple – the market cap changes when the price of the stock changes.

Since the stock price changes almost every second when the market is open – the market cap too keeps changing.

If the stock price does not change, the market cap too does not change.

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