Market capitalisation

Market capitalisation is the share price multiplied by the number of shares. In India, companies are ranked by it: the largest 100 are large-cap, the next 150 are mid-cap, and everything from the 251st onwards is small-cap.

What the number means

Market cap is simply what the whole company is worth on the market: a ₹500 share with 100 crore shares is a ₹50,000 crore company. It is not the same as size by sales or profit; it is the market’s price tag on the business. Because it is easy to measure and compare, the fund industry uses it to slot companies into tidy buckets.

Large, mid and small cap

The pattern as you move down the ladder is consistent: smaller companies usually have more room to grow, but also more volatility and more business risk. Large-caps are the established giants, steadier but slower; small-caps can grow fast or stumble badly. Mid-caps sit in between. None is “better”; they suit different horizons and nerves.

Why it matters for fund choice

Fund categories are defined by these bands, so the label on a fund tells you roughly how bumpy the ride is likely to be. A large-cap fund will be steadier than a small-cap fund by design, whatever their recent returns. Diversification across caps, often through a single diversified or index fund, spreads the risk. See large, mid and small cap explained.