28 Nov, 2025
4 mins read
Understanding the concept of outstanding shares is essential for anyone interested in the stock market. Whether you're analysing a company’s financial health or evaluating investment opportunities, knowing how outstanding shares work helps in making informed decisions. This blog explains what outstanding shares are, their types, how to calculate them and why they are important to investors.
Outstanding shares refer to the total number of a company’s shares that are currently held by all its shareholders. This includes shares owned by institutional investors, retail investors, company insiders, and employees. In short, these are shares that are actively in the hands of investors and are not held by the company as treasury stock.
These shares are used to calculate key financial metrics such as:
Earnings per Share (EPS)
Market Capitalisation
Book Value per Share
They directly influence shareholder value and company valuation in the stock market.
There are different classifications of shares that fall under the umbrella of outstanding shares:
Basic Outstanding Shares:
These are the shares that are currently issued and held by shareholders, excluding any potential dilution.
Fully Diluted Shares:
This figure includes all possible shares that could be issued through stock options, warrants, convertible bonds, or employee stock option plans (ESOPs).
Float Shares:
These are the shares available for trading on the open market and exclude shares held by insiders and the government.
Restricted Shares:
Often issued to company insiders or employees, these shares come with conditions that prevent them from being sold immediately.
Each type serves a different purpose and may impact investment decisions in various ways.
If you want to find the number of outstanding shares for a listed Indian company, here are some reliable sources:
Company's Annual Report: Check the balance sheet or notes to accounts for equity share capital.
Stock Exchanges: NSE and BSE websites provide details under the company’s stock information.
SEBI Filings: Companies are required to disclose shareholding patterns and changes regularly.
Financial News Platforms: Trusted websites like Moneycontrol, NSE India, and Economic Times Market section list this information.
These sources give you accurate data that reflect current outstanding shares and any recent changes due to buybacks or new issues.
The formula to calculate outstanding shares is simple:
|
Outstanding Shares = Issued Shares − Treasury Shares |
Let’s break it down:
Issued Shares: Total shares a company has ever issued.
Treasury Shares: Shares that the company has bought back and holds in its own account.
If a company has issued 1 crore shares and bought back 10 lakh shares:
Outstanding Shares = 1,00,00,000 − 10,00,000 = 90,00,000
These 90 lakh shares are considered outstanding and are used in calculating earnings per share and market capitalisation.
Outstanding shares are more than just a number; they play a crucial role in financial analysis and investment decisions. Here’s why they matter:
Earnings Per Share (EPS):
EPS is calculated using outstanding shares. Fewer shares with the same net income result in higher EPS.
Market Capitalisation:
This is derived by multiplying the share price by the number of outstanding shares.
Market Cap = Share Price × Outstanding Shares
Voting Rights:
Shareholders with outstanding shares have voting rights in annual general meetings and other corporate matters.
Dilution Impact:
If more shares are issued, existing shareholders’ ownership and EPS may reduce.
Buybacks and Splits:
Share buybacks reduce outstanding shares and may boost share value. Stock splits increase the number but don’t change total value.
Understanding these aspects helps investors gauge compaany performance and shareholder value more effectively.
Outstanding shares are a foundational element of a company’s capital structure. They influence financial metrics, market value, and ownership distribution. By understanding the different types and how to calculate them, investors can gain better insights into a company’s overall standing in the stock market. Always verify the latest data from credible sources to make sound investment decisions.
It refers to the total number of shares held by all shareholders, including institutions, individuals, and insiders, excluding any treasury stock.
Total shares refer to all issued shares, while outstanding shares exclude those bought back by the company and held as treasury stock.
Outstanding shares are neutral in themselves; their impact depends on factors like company performance, earnings, and shareholder value.
Yes, outstanding shares are tradable unless they are restricted due to insider holding conditions or lock-in periods.
Calculate your Net P&L after deducting all the charges like Tax, Brokerage, etc.
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