Market Capitalisation
SLIDE 1. Meaning of Market Capitalisation
Market capitalisation represents the total market value of a company’s outstanding shares. It is
calculated by multiplying the current share price by the total number of shares outstanding.
SLIDE 2. Importance of Market Capitalisation
Market capitalisation helps investors understand a company’s size, stability, and risk profile,
making it easier to compare companies and construct portfolios.
SLIDE 3. SEBI Classification Criteria
SEBI classifies companies into large-cap, mid-cap, and small-cap categories to bring
standardization and transparency for investors and mutual funds.
SLIDE 4. Large-Cap Companies
Large-cap companies are the top 100 firms by market capitalisation. They are stable, wellestablished,
and suitable for conservative investors.
SLIDE 5. Mid-Cap Companies
Mid-cap companies rank between 101 and 250. They offer a balance between growth potential and
stability with moderate risk.
SLIDE 6. Small-Cap Companies
Small-cap companies rank 251 and beyond. They provide high growth potential but involve higher
volatility and risk
SLIDE 7. Impact on Mutual Funds | Bonds |Multi-Caps and ETFs
Mutual funds | Bonds | ETFs must follow SEBI rules regarding market cap exposure, ensuring
alignment with fund objectives
SLIDE 8. Risk and Return Perspective, Diversification Strategy
Different market cap segments offer different risk-return profiles, helping investors align
investments with goals. Diversifying across market caps reduces dependency on a single segment
and balances portfolio risk.
SLIDE 9. Conclusion (Overview)
This section summarizes essential concepts
SLIDE 10. Questions & Answers
This section clarifies common doubts regarding market capitalisation