Before investing in any stock, we should be very clear about our Financial Goal, Expectation of Return and Risk Appetite. Understanding of Market Capitalisation of stock or share is very much essential.
What is Market Capitalisation ?
It is the value of a company that is traded on stock market and calculated by multiplying the total number of shares by the present share price.
Stocks are classified according to their Market Capitalisation ( or cap) as given below..
- Large Cap Stocks
- Mid Cap Stocks
- Small Cap stocks
Large Cap stocks :
- Stocks which have market cap of more than roughly 20 Thousand Crore are Large Cap stocks.
- These stocks are generally from large companies which are well-established in market.
- These are are generally safe to invest as the risk factor is minimum.
- Return on investment is generally lower in this type of stocks.
- Large Cap stocks which has market cap of more than roughly 75 Thousand Crore, are called Giant of the market.
Examples of Giant Large Cap Stocks in Indian Market :
TCS Ltd, ITC Ltd, Reliance Industries Ltd, HDFC Bank, ONGC, SBI, HDFC Ltd, Infosys Ltd, HUL, Maruti, Coal India, Asian Paints Ltd, Axis Bank Ltd, GAIL etc.
Examples of Large Cap Stocks (not Giant) in Indian Market :
Nestle India, Dabur India, Ambuja Cement, Cipla ltd, Siemens , Tata Steel, NMDC, REC, PFC etc.
Mid Cap stocks :
- Stocks which have market cap between 5000 Crore & 20000 Crore (roughly) are Mid Cap stocks.
- These are are moderately safe to invest as the risk factor is moderate.
- Return on investment is generally moderate in this type of stocks.
- It can produce huge return when invested for long time.
Examples of Mid Cap Stocks in Indian Market :
Central Bank, Canara Bank, Godrej Industries, NBCC, Tata Chemicals, NALCO, Gruh Finance, Crompton Greaves etc.
Small Cap stocks :
- Stocks which have market cap less than 5000 Crore (roughly) are Small Cap stocks.
- These are are less safe to invest as the risk factor is high.
- Return on investment may be very high or very low in this type of stocks.
- It can produce huge loss if invested without thorough market research.
Examples of Small Cap Stocks in Indian Market :
Timken India, Rashtriya Chemicals & Fertilizers Ltd, Triveni turbine, Sharda Cropchem, Karnataka Bank, Raymond, Cox & Kings, Sobha Ltd etc.
(Please note that the name of the companies given above are just for showing examples for your understanding and these are not my suggestions for investment.)
Happy Investing !!!
দীপ
দীপ
## Common Investors may collect ebook from the following link for mastering the basics of investment :
### Govt Job Aspirants in Mechanical Engineering (Degree or Diploma) may collect ebook from the following link for cracking Competitive Exams :
https://pothi.com/pothi/book/ebook-er-pradip-mondal-solved-exam-papers-wbpsc-mechanical-engineering