InvestmentFinancial Glossary
Market Capitalization
Definition
The total market value of a company's outstanding shares, calculated as Share Price multiplied by Total Number of Shares Outstanding. SEBI classifies companies as large-cap (top 100), mid-cap (101st to 250th), and small-cap (251st onwards) based on market capitalization.
Why It Matters
Market cap determines which funds can hold which stocks. A mid-cap fund cannot hold large-cap stocks beyond 35% of its portfolio. Understanding market cap helps you assess concentration risk — a Rs 5,000 crore company (small-cap) carries far more risk than a Rs 5 lakh crore company (mega-cap).