These companies offer a higher growth potential than do large-cap stocks, and hence more investors are attracted to investing in such companies. On the other hand, mid-cap companies also have the ability to turn into large-cap companies in the long run. This is because mid-caps tend to be more volatile. Investing in these companies can be riskier than investing in large-cap market companies. Mid-cap companies are companies whose market cap is above Rs 5,000 crore but less than Rs 20,000 crore. Their strong foothold in the market and consistent good performance makes them good choices for long-term investors. Reliance Industries and Infosys are examples of some large-cap market companies that are listed on the stock exchanges of India. The lower volatility makes them less risky. These stocks are less volatile in comparison to mid-cap and small-cap stocks. If you want to invest in a company’s stocks by taking less risk, then large-cap stocks are a good option. Besides, they will usually have been functioning for decades and have good reputations. They hold themselves well in times of recession or during any other negative event. These companies dominate the industry and are very stable. Large-cap companies have market caps of Rs 20,000 crore or more. Large-cap companies are businesses that are well-established and have a significant market share. Let us learn about each of them in detail. The companies that are traded on the stock exchanges can be categorised into three broad categories: large-cap, mid-cap, and small-cap. Therefore, the market capitalisation of ABC Company is Rs 4,00,000. Then, the market capitalisation of ABC Company will be calculated as follows: Suppose that ABC Company has 20,000 outstanding shares in the market and each share of ABC Company is priced at Rs 20. To make things simpler, let us consider the meaning of market capitalisation with the help of an example.
It is a measure of the estimated valuation of a company. Market capitalisation refers to the total number of outstanding shares of a company in the market multiplied by the current price of each share. Market Capitalisation: Meaning and Categories Let us first learn about the meaning of market capitalisation and its categories in detail. This article will help you to understand the differences between large-cap, mid-cap, and small-cap stocks. This categorisation helps investors to make informed investment decisions. Stocks in the stock market are often classified based on their market capitalisation (or market cap) as large-cap, mid-cap, and small-cap stocks. The share market has inherent risk and this risk varies from one stock to another. If you have no clue about which stocks you should put money in, you could face losses. Stock market investors must have sufficient knowledge to determine which stocks are the right choice for their investment strategy. Such questions can overwhelm even a seasoned investor.
When beginners enter the stock market, they often have questions about which stocks to invest in. Difference Between Large, Medium, and Small-Cap in Share Market
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