How to calculate Market capitalisation for listing on NSE?
This query is : Resolved
23 August 2010
One of the conditions for listing an existig company on NSE is that it's market capitalisation should be greater than 50 crores Rs.. How to calculate market capitalisation for this purpose?
The condition:
The market capitalisation of the applicant’s equity shall not be less than Rs. 50 crores. **
** Explanation 2 The market capitalisation shall be calculated by using a 12 month moving average of the market capitalisation over a period of six months immediately preceding the date of application. For the purpose of calculating the market capitalisation over a 12 month period, the average of the weekly high and low of the closing prices of the shares as quoted on the National Stock Exchange during the last twelve months and if the shares are not traded on the National Stock Exchange such average price on any of the recognised Stock Exchanges where those shares are frequently traded shall be taken into account while determining market capitalisation after making necessary adjustments for Corporate Action such as Rights / Bonus Issue/Split.
The condition:
The market capitalisation of the applicant’s equity shall not be less than Rs. 50 crores. **
** Explanation 2 The market capitalisation shall be calculated by using a 12 month moving average of the market capitalisation over a period of six months immediately preceding the date of application. For the purpose of calculating the market capitalisation over a 12 month period, the average of the weekly high and low of the closing prices of the shares as quoted on the National Stock Exchange during the last twelve months and if the shares are not traded on the National Stock Exchange such average price on any of the recognised Stock Exchanges where those shares are frequently traded shall be taken into account while determining market capitalisation after making necessary adjustments for Corporate Action such as Rights / Bonus Issue/Split.
07 September 2010
To compute 12 months moving average of 6 months you need 18 months preceding information.
Take the closing price of the share of every day for 18 months
Put this in columns Week1, Week2, etc. So you will have 18 months information presented in weekly columnar format (72 columns assuming 4 weeks per month)
For each column take the highest value and lowest value.
So you have 72 highest values and 72 lowest values.
For each column (highest value + lowest value) / 2. So you get average. This gives 72 average values. This is value per share
Get market capitalization by multiplying this value by number of shares outstanding. This gives you 72 market capitalization values.
You now have to find out the moving average of these 72 values over a period of 12 months each for the last 6 months. That is, you need 24 moving average values (6 months X 4)
Take the first 48 values. Compute average and put in column 49 (This is your first 12 months moving average value)
Take the average of values from column 2 to column 49 and put it in column 50
Take the average of values from column 3 to column 50 and put it in column 51
So and so forth
You will now have 24 moving average values
Take the average of these 24 values.
Hope you understood, if not, revert.
Take the closing price of the share of every day for 18 months
Put this in columns Week1, Week2, etc. So you will have 18 months information presented in weekly columnar format (72 columns assuming 4 weeks per month)
For each column take the highest value and lowest value.
So you have 72 highest values and 72 lowest values.
For each column (highest value + lowest value) / 2. So you get average. This gives 72 average values. This is value per share
Get market capitalization by multiplying this value by number of shares outstanding. This gives you 72 market capitalization values.
You now have to find out the moving average of these 72 values over a period of 12 months each for the last 6 months. That is, you need 24 moving average values (6 months X 4)
Take the first 48 values. Compute average and put in column 49 (This is your first 12 months moving average value)
Take the average of values from column 2 to column 49 and put it in column 50
Take the average of values from column 3 to column 50 and put it in column 51
So and so forth
You will now have 24 moving average values
Take the average of these 24 values.
Hope you understood, if not, revert.
Message likes :
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19 October 2010
thans a lot. i understood tehj first para but not the second.no need to clarify as i don't need it now
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