What are Small Cap, Mid Cap, and Large Cap Companies? Definition by SEBI

What is Market Capitalization?

Market cap is the total price of all the listed shares of a company on a stock exchange. It is obtained by multiplying the total number of listed shares with the price of each share. For instance, the price of each share of company X is Rs 10 and one lakh shares are listed on a stock exchange, the market cap of X is (10 * 100000 = Rs 10,00,000). Market cap changes with the share price and is not constant.

Classification of companies based on market capitalization

The Securities and Exchanges Board of India (SEBI) classifies companies, their market capitalization. Companies listed on Indian stock exchanges are classified according to their market capitalization as:

Large Cap Companies: These are the largest companies listed on an exchange and their market capitalization is usually greater than Rs 30,000 crores. Examples of such companies are Reliance Industries, TCS, Bajaj, Nestle, Dabur India, Hindustan Unilever, Indian tobacco company(ITC), IOCL, etc. These companies are usually part of an index such as Sensex or Nifty. According to SEBI classification, the top 100 companies are categorized as large cap.

Mid Cap Companies: The 101st-250th company in terms of full market capitalization are classified as mid-cap companies. The market cap of these companies lies between Rs 5,000 crores and Rs 30,000 crores. Examples of mid-cap stocks are TTK Prestige, Polycab India, Kajaria ceramics, UCO bank, Tata Chemicals, Abbott India, Castrol, Adani Gas, Sundaram Finance, Whirlpool, Emami, Jindal steel, etc.

Small Cap Companies: 251st company onwards in terms of full market capitalization are known as small cap companies. They have a market capitalization of less than Rs 5000 crores. Examples are Spicejet, Future Consumer, PVR, Blue Dart, Zydus Wellness, JK Cements, Chambal Fertilizers, Wockhardt, CEAT, Can Fin homes, Jain Irrigation, Thyrocare tech, Bombay Dyeing, etc.

Micro Cap companies: Although not defined by SEBI, micro-cap companies are very small companies generally having a market capitalization of less than Rs 1,000 crores. Most penny stocks are micro-cap companies. Examples are Shriram EPC, Reliance Communications, Sintex Industries, Unitech, SITI networks, Orient Green, Opto Circuits, Kasturi Global, Mercator, Shyam century, etc. I’m sure most of these companies are not known to you because these are small companies with less presence among the general population. The examples listed above are all penny stocks available at a price of less than Rs 10.

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