How Is Free Float MCap Important In Stock Investment Decisions?

Posted By:
Subscribe to GoodReturns

Market Capitalization for a stock is the current market price of the stock multiplied with its outstanding number of shares in the market. This well represents the total m-Cap of a company which is an indicator of the company's valuation which changes with the change in its price. Currently, Reliance Industries tops the lists of all conglomerates in the country.

How Is Free Float MCap Important In Stock Investment Decisions?

Further as a portion of the total M-cap, a portion of it makes up the free float market cap which takes into account the number of shares that are freely available for trading in the markets. These stocks are not locked in by promoters or others are held by government or some strategic holding.

Why Free Float M-Cap Is important?

M-cap that is a basis for determining the valuation of the company is weighed in heavily when deciding a stock bet and also is a criteria to determine expected returns.
With more or higher M-cap, volatility in the stock is lessened and at the same time it increases participation from institutional investors as then with more number of shares available for public trading they can buy and sell more number of shares of the scrip without drifting company share price either way majorly.

More free-float m-cap determines a high liquidity in the stock

Goodreturns.in

Please Wait while comments are loading...
Company Search
Enter the first few characters of the company's name or the NSE symbol or BSE code and click 'Go'

Find IFSC