The market capitalisation of Anil Ambani-promoted Reliance Communications Ltd (RCom) on Wednesday finished ahead of Infosys and Tata Consultancy Services for the first time reaching the fifth spot in the market capitalisation league table.
The market capitalisation of RCom at the end of trading on Wednesday was at Rs 1,10,807 crore as per the figures available on the BSE website. It is followed by Infosys at Rs 110,417 crore and TCS at Rs 1,09,335 crore.
Reliance Communications is at the fifth spot in terms of full market capitalisation. It is behind Reliance Industries Ltd, ONGC Ltd, Bharti Airtel and NTPC Ltd. While Reliance Industries leads with a market capitalisation at Rs 2,39,084 crore even National Thermal Power Corporation (NTPC) is quite some distance ahead at Rs 1,28,093 crore.
The Sensex however allocates weights to scrips on the basis of their free-float market capitalisation.
The free float market capitalisation is the price of the scrip multiplied by the number of shares that are freely available in the market.
This usually excludes the promoters’ holdings and other shares that cannot be traded.
According to the free float market capitalisation, RCom is at number eight.
While Reliance leads this table too, Infosys is at the second spot here followed by ICICI Bank, Larsen & Toubro, Bharti Airtel, HDFC and ITC Ltd. RCom follows ITC Ltd.
While 85 per cent of Infosys Technologies shares are counted for the free float market capitalisation calculations, only 35 per cent of RCom shares are taken into account.
For professionally managed companies like ICICI Bank, the entire shareholding is considered as free-float. It is as high as 90 per cent for HDFC and Larsen & Toubro.
On the other hand, in case of companies like National Thermal Power Corporation (NTPC) and Tata Consultancy Services, only 15 per cent and 20 per cent of their respective shareholdings are considered for the free float market capitalisation.
For Reliance Industries it is 50 per cent and for ITC Ltd it is 70 per cent.
Interestingly, the National Stock Exchange (NSE) flagship index, that has the top 50 shares, however, calculates weights of the scrips making it up in terms of their full market capitalisation.