Introduction:
As we know, there is a lot of confusion regarding large capital, medium capital, and small capital that we don’t know how to recognize. So today’s topic is dedicated to this information. I will decode it briefly so you can learn more. Kindly stay tuned and read all the details carefully.
What is Market Capitalalisation?
First, we understand what market capitalization is. Market capitalization refers to the total value of the company when you multiply the total outstanding share by the market price of the share you will get market capitalization. For example, the total number of shares XYZ is Rs10000 and the price of XYZ shares is Rs 100. So the total no of shares of Rs 10000 multiplied by the market price of shares Rs 1000 equal to Rs 10,000,000. So this is a total market capitalization of Rs 10,000,000.
Now We will discuss Large capital, Medium Capital, and Small Capital.
What Is large capital?
Large capital refers to bluechip company and Sebi developed some criteria for large capital. The top 100 companies come into the large cap and their total market capital is Rs 20000 crore or more. Mutual fund companies invested in the top 100 companies and that will be large cap mutual funds. Large capital has a good track record and it performed well in comparison to other funds or capital.
What is Medium capital?
Medium capital refers to those which have 100 to 150 top companies come into this Medium capital. Medium capital worth Rs from 5000 crore to 15000 crore. Mid-cap also has a good track record but less than large capital and more riskier than large capital. Mutual funds that hold these companies become mid-cap mutual funds.
What Is Small Capital?
From the top 150 companies to 250 companies come in small capital and it is very riskier than large-cap, mid-cap. And total market capital of small capital is less than 5000 crore.
Small capital doesn’t have a good long track record, mainly startup companies come under small capital which is in the development phase. In small Capital, the return is higher but also risk is high. Will understand with the below table.
Difference between large Capital, Medium Capital, and Small Capital.
| Aspects. | Large Capital. | Medium Capital. | Small Capital. |
| Market Capitalization. | More than 20000 crore. | Between 5000 to 15000 crore. | Less than 5000 crore. |
| Company type. | More established and stable. | Potential growth and well-established. | High growth and more risk. |
| Volatility. | Low. | Moderate. | High. |
| Risk. | Low. | Moderate. | High. |
| Return. | Stable and steady. | Moderate and potential for high return. | High return but more volatile. |
| Liquidity. | High. | Moderate. | Low. |
Conclusion:
Large capital, mid-cap, and small-cap are performing according to the performance of the company but we can choose according to our risk appetite. Large-caps are more stable and established in comparison to mid-cap and small-cap. Mid-cap and small-cap are more riskier than large capital. If you want to go for a high return so you can go with the small cap but the risk is very high in the small cap. If we talk about mid-cap risk and return will be moderate so choose your best and always keep in mind that investment should be long-term then you can reap more profit. Thank you and I hope you got all your points.
Disclaimer:
This is only for educational purposes and there are no buying and selling recommendations so take your decision at your own risk and you can also discuss with your financial advisor.