What is market capitalization?

What is market capitalization?

Any company you choose in the stock market falls into one of these three categories. 

Small Cap, Mid Cap and Large Cap.

Cap means Capitalizations. 

Market capitalization refers to the aggregate value of a company. Market capitalization also determines the size of a company. 

The formula for market capitalization is: –

Market Capitalization = Market Price of 1 Share * No. of Outstanding Shares. 

E.g. There is a company called XYZ whose share price is Rs.1000. And the company’s outstanding shares are 100,000 

MARKET CAPITALIZATION= 1००० * 1०००००=100000000

The company with a market capitalization of 30,000 Cr. Is called LARGE CAP. The company whose market capitalization is 15000 Cr. to 30,000 Cr. It is called MID CAP company. And the company 15000 Cr.Rs. Less than . They are called SMALL CAP. 

There is no such thing as a permanent “CRITERIA” for small cap, mid cap, large cap. A few years ago, some companies had a market capitalization of Rs 15,000 crore. Rs. It was called LARGE CAP company. But today a company with a capitalization of Rs 15,000 crore is called MID CAP. 

Small cap companies are the first to start up. GROWTH POSSIBILITIES of these companies are high. But the risk from these companies is the same. 

Small Index is S&P BSE Small Cap. &

Mid Cap Index is S&P BSE Mid Cap. 

TCS, INFY, RELIANCE INDUSTRIES, are Large Cap companies. All large cap companies are large in their sector. Large cap companies are in NIFTY and SENSEX. 

One thing to keep in mind is that every large cap company was the first small cap and mid cap and not all companies become large cap from these small cap and mid cap. 

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