For Dec 14,considering the free float market capitalisation at the MRP of individaul stocks and the share price data as of 16th April,the Nifty@MRP is at 8372.On 16th April,NSE Nifty index closed at 8706,which is ~4% or 334 points above the nifty @ MRP.It indicates that the index is fairly valued.
plz tell me how the calculate Nifty MRP?
The CNX Nifty is computed using market capitalisation weighted method wherein the level of the Index reflects the total market value of all the stocks in the Index relative to the base period November 3,1995.
The total market cap of a company or the market capitalisation is the product of market price and the total number of outstanding shares of the company.
Market Capitalization = Equity Capital * Price
Free Float Market Capitalization = Equity Capital * Price * IWF
Index Value = Current Market Value / Base Market Capital * Base Index Value (1000)
Base market capital of the Index is the aggregate market capitalisation of each scrip in the Index during the base period. The market cap during the base period is equated to an Index value of 1000 known as the base Index value.
Source: http://www.nseindia.com/content/indices/nifty_freefloat_method_new.pdf