Eight prominent Indian companies listed on the Nifty200 index reported enterprise values significantly higher than their market capitalization as of September 2025. This financial trend suggests these firms carry substantial debt or other liabilities compared to their stock market worth. For investors, this difference often points to increased financial risk and a form of "hidden leverage" within a company's structure.^[1] ### Understanding Company Value Metrics Market capitalization, or market cap, is a straightforward way to measure a company's size. It is simply the total value of all its outstanding shares, calculated by multiplying the current share price by the number of shares available.^[2][3][4] This figure is widely used and appears on most financial news sites.^[2] However, market cap does not consider a company's debt or its cash reserves.^[3][5][6] Enterprise value (EV) offers a more complete picture of a company's total worth. It includes the market capitalization, adds total debt, and then subtracts cash and cash equivalents.^{[2][3][4][7][8]} Financial experts widely see EV as a more accurate reflection of what it would cost to acquire the entire business, not just its equity.^[3][1][8] Michael Mack, an Associate Portfolio Manager at VictoryShares and Solutions, explained, "People often think of stocks as these esoteric vehicles. But at the end of the day, buying a share of stock is the same as investing in a business."^[5][6] He noted that enterprise value provides a more comprehensive assessment of a company's future value.^[5][6] ### Why Enterprise Value Can Exceed Market Cap When a company's enterprise value is notably higher than its market capitalization, it typically means the company has significant debt or other financial obligations that are not reflected in its share price alone.^[2][9][1] This situation can also arise if a company has limited cash reserves.^[1] A high EV to market cap ratio indicates that there is a substantial amount of debt or liabilities relative to the company's equity value, increasing its financial risk.^[1] For investors, this imbalance can be a red flag. Companies with high debt levels face greater financial pressure, especially if sales decline, as interest payments remain constant and can severely impact net profits.^[10] Ignoring a company's debt can lead investors to believe a stock is more attractive than it truly is.^[5][6] ### Eight Companies with Higher Enterprise Value Data from StockEdge's valuation scan, as of September 2025, highlights eight Nifty200 companies where enterprise value significantly outstrips market capitalization.^[1][11] These companies span various sectors, including telecommunications, infrastructure, energy, and industrials. Leading this list is **Vodafone Idea**, with an EV/Market Cap ratio of 2.50. Its enterprise value stood at Rs 319,490 crore, while its market capitalization was Rs 127,736 crore.^[11] This substantial difference points to considerable financial leverage within the telecom giant. **Grasim Industries**, a diversified conglomerate, showed an EV/Market Cap ratio of 2.00. The company's enterprise value reached Rs 389,224 crore, against a market cap of Rs 194,537 crore.^[11] This suggests significant debt contributing to its overall valuation. In the infrastructure sector, **IRB Infrastructure Developers** recorded an EV/Market Cap ratio of 1.73. Its enterprise value was Rs 44,742 crore, compared to a market cap of Rs 25,847 crore.^[11] Heavy investment in projects often requires substantial borrowing, which is reflected in its higher EV. The power generation giant **NTPC** also featured on the list with an EV/Market Cap ratio of 1.72. The company's enterprise value was Rs 585,568 crore, while its market cap was Rs 341,323 crore.^[11] Large-scale power projects are capital-intensive, frequently leading to high debt. **JSW Energy**, another player in the energy sector, had an EV/Market Cap ratio of 1.71. Its enterprise value was Rs 152,407 crore, with a market cap of Rs 89,241 crore.^[11] This indicates significant debt financing for its operations and expansion. Oil and gas major **Indian Oil Corporation** showed an EV/Market Cap ratio of 1.57. Its enterprise value was Rs 370,548 crore, against a market cap of Rs 235,542 crore.^[11] Companies in this sector often carry substantial debt for exploration, refining, and distribution. Similarly, **Hindustan Petroleum Corporation** reported an EV/Market Cap ratio of 1.55. The company's enterprise value stood at Rs 163,399 crore, with a market cap of Rs 105,487 crore.^[11] Its operations, like Indian Oil, necessitate significant capital. Finally, **Power Grid Corporation Of India** had an EV/Market Cap ratio of 1.50. Its enterprise value was Rs 379,189 crore, compared to a market cap of Rs 252,093 crore.^[11] Building and maintaining extensive power transmission networks involves considerable long-term debt. ### Implications for Investors The presence of a higher enterprise value compared to market capitalization highlights "hidden leverage" within these companies.^[1] For investors, this means looking beyond the simple market cap figure is critical to understanding a company's true financial health and potential risks. Enterprise value provides a more comprehensive view of a company's financial standing, especially when comparing firms with different capital structures, such as varying levels of debt versus equity.^[7][5][6] Value investors often use EV to identify companies that might be undervalued or to assess the real cost of acquiring an entire business.^[2][9] Therefore, a thorough analysis of enterprise value helps investors make more informed decisions by accounting for all financial obligations.

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