F

Glossary · PSX term

Free-float market capitalisation.

Free-float market cap values only the shares available for public trading, not locked or strategic holdings.

Definition

It multiplies the free-float share count by the market price, and is the basis for weighting the KSE-100 and KMI indices. A company can have a large total market cap but a small free-float market cap if founders or government hold most shares.

Worked example

If a company has 1 billion shares at Rs. 100 but only 25% free float, its free-float market cap is Rs. 25 billion, not Rs. 100 billion.

Related on PSX Clarity

Market capitalization

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