Market Capitalization and Its Impact on Equity Valuation a Mixed Method Study of The Indian Capital Market

Abstract

An investor must perform research on a stock before investing in it. It is critical for the intelligent investor. As a result, stock prices have long piqued the interest of investors. Researchers have worked hard to identify the elements that influence stock prices and so returns. In the current study, 300 companies listed on India's National Stock Exchange (NSE) were divided into three categories based on market capitalization. The study relied on both primary and secondary data to reach its findings. Logistic regression is used to examine secondary data in the form of historical financial information. The outcomes of secondary data analysis are then confirmed using primary data gathered through interviews with domain experts. The study also revealed the importance of the new variables PEG ratio and economic value added (EVA) in Indian scenario to predict the market price of large cap companies.  The study's findings can help market participants such as fund managers, stocks analysts, portfolio managers, retail investors, and high-net-worth individuals. The findings of the study will also contribute to the current body of knowledge on equity valuation.