Market Capitalization — Large Cap, Mid Cap & Small Cap
Market capitalization is the total market value of a company's outstanding shares. It's the primary way stocks and mutual funds are categorized by size.
How Market Cap Is Calculated
Market Cap = Current Stock Price × Total Outstanding Shares. Example: A company with 10 crore shares trading at ₹500 = Market cap of ₹5,000 crore.
Categories (SEBI Classification)
Large Cap: Top 100 companies by market cap (Reliance, TCS, HDFC). Stable, lower risk, moderate returns (10-12%). Mid Cap: Ranked 101-250 (Voltas, Persistent Systems). Higher growth potential, moderate risk (12-15%). Small Cap: Ranked 251+ (thousands of companies). Highest growth potential, highest risk (15-20%+ or big losses).
Which to Choose
Beginners/conservative: 70-80% large cap. Moderate risk: 60% large + 25% mid + 15% small. Aggressive: 40% large + 30% mid + 30% small. Always have a large cap core — it provides stability during market crashes.