Sebi redefines mcap

New Delhi: Markets regulator Sebi has revamped the method for calculating the market capitalisation (mcap) of listed companies under the Listing Obligations and Disclosure Requirements (LODR) rules.

Instead of using the market capitalisation of a single day (currently March 31), listed companies will now use the ‘average m arket capitalisation’ for a six-month period. Market experts believe the market capitalisation of a listed entity keeps fluctuating on a daily basis based on market dynamics and, therefore, an average of market capitalisation figures over a reasonable period of time (six months) would more accurately reflect the market size of the listed entity and consequently the ranking, vis-a-vis its peers.

The changes came after a recommendation of an expert committee chaired by Sebi’s former whole-time member SK Mohanty in a bid to promote ease of doing business (EoDB).