What Is Free Float Market Cap? (2026)
Free float is the portion of a company's shares that is actually available for the public to buy and sell, as opposed to the shares held by promoters, the government, strategic investors and other holders who are not expected to trade. NSE Indices measures it with an investible weight factor (IWF) computed from each company's quarterly shareholding pattern, and weights the Nifty indices by free-float market cap. This page was last checked against NSE Indices' Methodology Document for Equity Indices, September 2026 edition, read on 4 October 2026.
Definition
Free float
is the part of a company's equity that is expected to be available for trading, after removing promoter, strategic, government, locked-in and similar holdings. NSE Indices expresses it as an investible weight factor between 0 and 1, computed from the shareholding pattern each company files every quarter. Source: NSE Indices methodology, September 2026.
What is excluded from free float?
NSE Indices' methodology lists 22 categories it removes from the free-float computation "where identifiable separately". Grouped, they are:
- Promoter side (5): shareholding in the promoter category, depository receipts held by promoters, family members of the promoter, trusts managed by the promoter group, and persons acting in concert with promoters
- Insiders (3): directors, key management personnel (KMP), and employee benefit or welfare trusts
- Board-linked public holders (2): a public shareholder who nominates, or is entitled to nominate, a board member
- Strategic and government holdings (5): associate and group cross-holdings, strategic investment by corporate bodies, holders with a first right of refusal for the company or promoters, government holdings in a company the government promotes, and government holdings in a company it does not (insurance companies excepted in both)
- Long-term foreign and private capital (5): foreign direct investment, private equity investors, private equity funds, foreign venture capital investors and sovereign wealth funds
- Shares that cannot move (2): shares under lock-in reported in the public category, and shares held by the Investor Education and Protection Fund (IEPF)
The promoter line it starts from is the group total, which is why a promoter group definition matters here. Every one of these lines is read from the company's shareholding pattern.
How is free float market cap calculated?
NSE Indices computes index market capitalisation as shares outstanding x IWF x capping factor x price, with the IWF set to 1 for indices built on full market cap and the capping factor set to 1 for uncapped indices. The IWF is the share count left after the excluded holdings, divided by total shares, rounded to six decimals. In the methodology's worked example, a company with 1,00,00,000 shares and 39,12,062 shares in excluded categories gets an IWF of 0.608794.
0.10
Minimum IWF (10% free float) for a stock to be eligible for the Nifty 500, unless it passes the alternative market-cap test
Source: NSE Indices Methodology Document for Equity Indices, September 2026
The alternative test: a stock with an IWF below 0.10 stays eligible if its six-month average free-float market cap is at least 25% of the six-month average full market cap of the smallest existing Nifty 500 constituent. The Nifty 100 uses the same pair of tests against its own smallest constituent.
When does free float change?
Because the IWF comes from the quarterly shareholding pattern, it moves when the filing moves. A promoter sale, a lock-in expiry or a strategic investor's exit shows up as a different IWF after the next pattern is filed. The methodology treats an IWF change like other corporate actions on a free-float index: the index divisor is adjusted so the change in market value does not move the index level by itself.
For the current season, the shareholding pattern for the quarter ended 30 September 2026 is due within 21 days of quarter end under SEBI LODR Regulation 31(1)(b), so the shareholding patterns that feed IWFs are due by 21 October 2026. NSE Indices revises IWFs on its own schedule.
Why does free float matter when you read ownership data?
Free float is the flip side of concentrated ownership. A stock with a low free float has most of its equity with holders who are not expected to trade, so the tradable pool is small. Changes in promoter pledging or heavy institutional accumulation both play out against that pool. When several independent investors disclose stakes in a low-float name, that ownership overlap sits in a smaller pool of tradable shares.
Flock reads the promoter, institutional and public split from the same shareholding patterns that feed free-float calculations, dated and source-linked. What it means for you is your call to make.
Frequently asked questions
What is excluded from free float?
NSE Indices excludes 22 categories where it can identify them, including the promoter category, promoter family and trusts, cross-holdings, employee trusts, directors and KMP, strategic corporate stakes, government holdings, FDI, private equity, sovereign wealth funds, IEPF and locked-in public shares. Source: NSE Indices Methodology Document for Equity Indices, September 2026.
How is free float market cap calculated?
NSE Indices multiplies shares outstanding by the investible weight factor (IWF), a capping factor and the price. The IWF is the share count left after the excluded holdings, divided by total shares, rounded to six decimals. Its worked example gives an IWF of 0.608794. Source: NSE Indices Methodology Document for Equity Indices, September 2026.
Where does the free float number come from?
From the company's own quarterly shareholding pattern. NSE Indices states that IWFs are determined from the public shareholding disclosed in the shareholding pattern each company submits to the stock exchanges every quarter. Source: NSE Indices Methodology Document for Equity Indices, September 2026.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.