Free-float methodology is a method of calculating the market capitalization of a stock market index's underlying companies. Using this methodology, the market capitalization of a company is calculated by taking the equity's price and multiplying it by the number of shares readily available in the market.

How do you calculate free float market capitalization?

Free Float Market Capitalization is a method by which the market cap of an index's underlying are calculated and are calculated by multiplying the price with the number of outstanding shares and does not consider the shares that are held by promoters, insiders and the government.

What is the difference between free float market capitalisation and market capitalisation?

In standard market capitalisation, the calculation involves determining the total number of outstanding shares, including both public and privately owned ones. However, in free-float market cap method, the valuation of a company relies only on the outstanding shares held publicly.