Do you know Market Capitalisation wasn't the same before 2003?
Before 2003, to calculate Market Capitalisation, all shares were considered.
But then *Free-Float Market Capitalisation* came into the picture.
What's that?
For example , let's say a company has 1000 shares in total.
60% is available for the public to buy.
40% is with the management and owners.
Free-Float Market Capitalisation = 600x10 = 6,000
Where 10 is the value of each share.
Sensex, Nifty and other indices are formed on the basis of free-float market capitalisation of the companies.
Next time when you look at the Market Capitalisation, you know how it works!