š¢ What is Market Cap?
Market Cap is the total value of a company in stock market. It's calculated by multiplying share price with total number of shares.
Formula:
Market Cap = Share Price Ć Total Shares
š Market Cap Example
Reliance Industries
Share Price: ā¹2,500
Total Shares: 676 crore
Market Cap: ā¹16,90,000 crore
Small Company
Share Price: ā¹100
Total Shares: 10 crore
Market Cap: ā¹1,000 crore
š Types of Market Cap
Large Cap (ā¹20,000Cr+)
Stable, established companies
Mid Cap (ā¹5K-20K Cr)
Growing companies
Small Cap (<ā¹5,000Cr)
High growth potential
āļø Risk vs Return
Large Cap
Low Risk, Stable Returns (8-12%)
Mid Cap
Medium Risk, Good Returns (12-15%)
Small Cap
High Risk, High Returns (15-20%)
š Company Examples
Large Cap
TCS, Reliance, HDFC Bank, Infosys
Mid Cap
Zomato, Paytm, Nykaa, PVR
Small Cap
Regional banks, textile companies
š” Investment Strategy
Beginners:
Start with large cap (70-80%)
Experienced:
Mix: 60% large, 25% mid, 15% small
Aggressive:
Higher allocation to mid/small cap
š Market Cap Comparison
| Category | Market Cap | Risk Level | Expected Return | Volatility |
|---|---|---|---|---|
| Large Cap | ā¹20,000Cr+ | Low | 8-12% | Low |
| Mid Cap | ā¹5K-20K Cr | Medium | 12-15% | Medium |
| Small Cap | <ā¹5,000Cr | High | 15-20% | High |
ā Frequently Asked Questions
Does higher market cap mean better company?
Not necessarily. Market cap shows size, not quality. A large cap company is more stable but may grow slower than small cap.
Can market cap change daily?
Yes, market cap changes with stock price. If share price goes up, market cap increases and vice versa.
Which market cap is best for beginners?
Large cap stocks are best for beginners due to lower risk and stable returns. Start with 70-80% large cap allocation.
Should I invest only in large cap?
No, diversify across market caps. Large cap for stability, mid cap for growth, small cap for high returns (with higher risk).
š Related Guides
Diversify Across Market Caps
Build a balanced portfolio with large, mid, and small cap stocks for optimal returns.