Market capitalization refers to the total rupee market value of a company’s outstanding shares of stock. Commonly referred to as “market cap,” it is calculated by multiplying the total number of a company’s outstanding shares by the current market price of one share.
Company ABC has total of 1 crore outstanding shares and the current market price for this company is Rs. 100 per share, than market cap would be,100 * 1cr.= 100 crore. Market capitalization matters most while assembling stocks in to different indices. You may have seen different weight-age of particular stocks in indices. for example Reliance industries weighs highest with huge market cap.