Fundamental Glossary / Shareholding & Ownership
Free Float
Shares that are actually available to trade, excluding promoter holdings, locked-in shares, and other non-tradable strategic stakes as the index method defines them.
Formula
Free-float shares / total shares. Index providers publish the method. NSE and BSE free-float factors follow SEBI's framework.
What it means
Free float is the supply the market can buy and sell. Market capitalization times the free-float factor is the free-float market cap used in index weights.
A stock can have a large market cap and a small free float. It will be more volatile and harder to enter or exit in size.
How to read it
A low free float magnifies the price impact of a small order and of any institutional rebalance. It is a liquidity fact, not a quality fact.
What to watch
Free-float definitions differ slightly across index providers. A global index and a domestic index may not exclude the same strategic holder.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.