Market Capitalisation
Reliance Industries is worth more than the entire GDP of some countries, at least on paper. Market capitalisation is what the stock market currently thinks a company is worth: its share price multiplied by the total number of shares. It is a real-time, constantly shifting estimate, not a fixed value.
Market cap tells you how big a company is in the market’s eyes. It says nothing about how much cash the company actually holds.
A company can carry a massive market cap while barely turning a profit if investors believe its future growth justifies today’s price. Market cap is used to sort companies into large-cap, mid-cap and small-cap, but it is rarely the only number a serious investor checks.
When Reliance Industries crossed ₹20 lakh crore in market capitalisation in February 2024, it became worth more than the annual GDP of many mid-sized economies. The milestone reflected investor confidence in its retail and telecom businesses, not a sudden change in the cash in its bank accounts.