Stock Float

Stock float, also called free float, refers to the number of shares of a company that are available for trading in the open market — excluding shares held by promoters, strategic investors, government entities, and insiders who are subject to lock-in restrictions. A low-float stock has relatively few shares available for trading, which means even moderate buying or selling pressure can cause sharp price movements. High-float stocks tend to be more liquid and less volatile. In India, SEBI requires a minimum public float of 25% for most listed companies, ensuring adequate liquidity for retail investors. The free float market capitalisation — computed using only the publicly tradeable float — is used to determine the weightage of stocks in indices like Nifty 50 and Sensex, which is why stocks with low public float carry smaller index weights regardless of their total market capitalisation.