Market capitalization (often abbreviated as "market cap") is a measure of the total value of a publicly traded company's outstanding shares. It is calculated by multiplying the number of outstanding shares of a company by its current market price per share.
Market capitalization is used as an indicator of the size and value of a company. Companies are typically divided into three categories based on their market cap:
1 . Large Cap - Companies with a market cap of over ₹49,000 CR are considered large cap. These are typically well-established companies with a long history of consistent earnings and a large market share in their respective industries. They're first 100 companies and they normally cannot be manipulated in the market
2 . Mid Cap - Companies with a market cap between ₹16,000 CR to ₹49,000 CR are considered mid cap. These are typically companies that have already experienced some level of success but are still growing and expanding.
3 . Small Cap - Companies with a market cap less than ₹16,000 CR are considered small cap. These are typically younger companies that are still in the growth stage and have yet to establish a significant market share in their respective industries.
It's important to note that the boundaries between these categories are not fixed and can vary depending on factors such as market conditions and investor sentiment. Additionally, companies can move between categories as their market cap grows or shrinks over time.
Investors often use market cap as one of many factors to evaluate a company's investment potential. Large cap companies are generally considered to be less risky and more stable, while small cap companies are considered to be higher risk but potentially offer greater growth opportunities. It's important to conduct thorough research and analysis before making any investment decisions, regardless of a company's market cap.
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