What Are Market Caps in Stock Investing?
When you hear Large Cap, Mid Cap, and Small Cap, they refer to a company’s market capitalization — that is, the total value of its shares in the stock market.
📌 Market Cap = Share Price × Total Number of Shares
In India, SEBI defines categories like this:
| Category | Market Cap Range (Approx.) | No. of Companies |
|---|---|---|
| Large Cap | Top 100 listed companies | 100 |
| Mid Cap | 101st to 250th companies | 150 |
| Small Cap | 251st and beyond | Remaining |
What is a Large Cap Stock?
Examples: Reliance Industries, TCS, Infosys, HDFC Bank
Large and stable companies
High investor trust
Less volatile
Moderate but consistent returns
Ideal for long-term, low-risk investors
✔️ Best for beginners and long-term wealth building
What is a Mid Cap Stock?
Examples: Tata Power, Trent, Mphasis, Polycab
Growing companies with strong potential
Moderate risk and returns
Can outperform large caps in a bull market
Volatile during market corrections
⚠️ Best for growth-oriented investors willing to take some risk
🧪 What is a Small Cap Stock?
Examples: Brightcom Group, Ujjivan SFB, RattanIndia, Suzlon
Emerging, lesser-known companies
High risk and high reward
Prone to market swings
Low liquidity (hard to sell quickly)
🔥 Suitable for experienced investors or those with higher risk appetite
🧠 Summary Table: Large Cap vs Mid Cap vs Small Cap
| Feature | Large Cap | Mid Cap | Small Cap |
|---|---|---|---|
| Stability | Very High | Moderate | Low |
| Returns | Moderate | High (with risk) | Very High (very risky) |
| Volatility | Low | Moderate | High |
| Risk | Low | Medium | High |
| Suitable For | Beginners, Long-Term | Growth Investors | Risk-takers |
📌 Which One Should You Choose?
For Stability: Start with Large Caps
For Growth: Add Mid Caps to diversify
For Aggressive Gains: Small Caps can offer big wins (but watch closely)
🧭 Diversification is key: A balanced mix based on your goals works best.
🙋♂️ FAQs
Q1. Can I invest in all three categories?
👉 Yes, through mutual funds or direct stock investing. Diversification helps reduce risk.
Q2. Are Small Cap stocks risky?
👉 Yes. They can offer higher returns but are more volatile and risky than Large/Mid Caps.
Q3. How often do SEBI market cap definitions change?
👉 SEBI revises the cap classifications semi-annually, based on full market capitalization.
Published on : 25th July
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed