What is market capitalisation?
Market capitalisation, or market cap for short, is the total price of a company’s ownership in the market’s eyes. The sum is simple: current share price × total number of shares. If someone wanted (in theory) to buy every share at today’s price, this is roughly what it would take.
Share prices change every day, so market cap changes every day too. A company’s factories, machines and bank balance do not change overnight, but if the share price falls 10%, the market cap falls 10% as well. In other words, it is the market’s view today of the company’s future.
Say a biscuit company has 1 crore shares in total, each priced at Tk 50. Its market cap is Tk 50 crore. It is like valuing a neighbourhood shop by multiplying its number of shares by the price of each. If the share price goes to Tk 60, the market cap becomes Tk 60 crore, even though the company has not baked a single extra biscuit. The numbers are only an example.
Why it matters to an investor
- To see a company’s real size: a high share price does not mean a big company. Size is compared using market cap.
- To judge cheap and dear properly: a Tk 20 share may look “cheap”, but the whole company’s price may be very high relative to its earnings.
- To understand indices: in an index such as the DSEX, companies with a bigger market cap carry more weight, so a few large companies can move the whole index.
- To understand risk and ease of trading: shares of small companies usually swing more, trade less, and are easier to push around with little money.
Large, mid and small caps, and free float
Companies are often grouped by market cap into large caps, mid caps and small caps. There is no universal rule for the cut-offs; they differ by country and index provider. A company counted as a “small cap” in a big market might be one of the largest in Bangladesh.
Free-float market cap counts only the shares that actually trade, leaving out those locked up with sponsors, the government or strategic owners. A company can have a large market cap, but if most shares sit with its sponsors, few are available to trade and the price can move sharply on little activity.
How big Bangladesh’s market is
According to Bangladesh Bank, the total market cap of all securities listed on DSE was about Tk 6,987 billion (about Tk 6.99 lakh crore) in June 2026, roughly 11.4% of GDP; in December 2025 it was about 12.2% of GDP. There were 360 listed companies at the time.
However, about half of that total is government treasury bonds, which are also listed on DSE: about 47.7% in June 2026 and about 51.9% in December 2025. Counting only company shares, the market is much smaller. A November 2025 report put listed companies’ market cap at about US$25.8 billion, and India’s market value at about 142% of GDP. When the news quotes “market capitalisation”, check what it includes.
Source: Bangladesh Bank, Monthly Report on Capital Market, June 2026
See the numbers as a table
| Government treasury bonds | Company shares and others | |
|---|---|---|
| Total market cap | 48 | 52 |
What market cap does not tell you
- How much money the company has: market cap comes from the share price. A falling share price does not reduce the company’s bank balance, and a rising one does not hand it new money.
- How much it owes: two companies can have the same market cap while one carries heavy debt. To value the whole business, debt has to be counted too.
- What everyone would get by selling: if everyone tried to sell at once, the price would fall, so the paper market cap can never all be turned into cash.
Worked example
- Company A: share price Tk 1,000, 10 lakh shares in total. Market cap: 1,000 × 10 lakh = Tk 100 crore.
- Company B: share price Tk 20, 50 crore shares in total. Market cap: 20 × 50 crore = Tk 1,000 crore, ten times A.
- Say A earns Tk 10 crore a year and B earns Tk 50 crore. For every Tk 1 of profit, the market is paying Tk 10 for A (100 ÷ 10) and Tk 20 for B (1,000 ÷ 50).
Result: the company with the Tk 20 share is actually far bigger, and also more expensive relative to its profit. The share price alone says nothing; size needs market cap, and cheap or dear needs a comparison with profit or assets. The numbers are only an example.
Common mistakes
- Thinking a low-priced share is “cheap”. Compare the price of the whole company with what it earns, not the share price.
- Thinking a company gained cash because its market cap rose. It is only a calculation from the market price.
- Taking DSE’s total market cap as the value of company shares alone. About half of it is government bonds.
- Assuming a large market cap means safe. Big companies’ prices can fall a long way too.
A company’s size is measured by market cap, not share price: price × total shares. And it is the market’s opinion today, not money in the company’s hands.