Share Market basics for beginners >> Small Cap vs Mid Cap vs Large Cap Stocks
Rishi Kashyap
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Small Cap vs Mid Cap vs Large Cap Stocks


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In 2017 SEBI defined rules to classify companies according to their market capitalisation. Listed companies were classified in three different categories

What is market capitalisation ?
Market capitalisation means total number of outstanding shares trading in the market for a company multiplied by price of each share. Market cap is used to estimate valuation of a company. SEBI categorised company basis below valuation
Large CapMid CapSmall Cap
Market CapAbove 20,000 CroresBetween 5,000-20,000 CroresBelow 5,000 Crores
Since most large cap companies have decades old performance records and are reputed, they are considered safe investments. Mid Cap and Small cap companies may not have consistent results as the large cap, and are considered moderately risky.
When you go to mutual funds and they say we invest in BLUE CHIP Shares mostly they mean these Large Cap stocks. Mid cap and small cap companies while considered risky, still investors have large growth expectations from such companies.
Large cap mid cap small cap stocks
My personal investment is mostly in mid cap and small cap companies. I have found most large cap companies too popular and over priced to invest most of the times !
Many Small cap and mid cap stocks on the other hand are performing consistently and yet are undervalued. Since many are unknown to the masses you get good bargains in this category.
As for the risk factor I believe that risk is in not knowing what you are doing ! If you can value the stocks and can understand the probability in stock market to make estimates of the company growths your investments will perform better. So called large caps of today were, mid cap or small cap stocks a decade ago !

Rishi Kashyap | | EDIT