What is Market Capitalisation and how to classify all the listed companies based on it?
What is Market Capitalisation and how to classify all the listed companies based on it? If you are just beginning in the market and have heard some jargons like Large cap, Mid cap, Small cap and market capitalization (M-cap) and get confused, then the concept of Market Capitalization is very important for you to understand. I will try to keep it short and crisp… :) In this Article, we will understand a very important parameter used to classify all listed companies in any market be it India, USA, China, Japan and so on. That parameter is Market Capitalisation. Let's look at what it means and how it simplifies our understanding of various concepts such as risk associated with a stock. Understanding M-cap is mandatory for you to get what these Mutual Funds, DIIs, FPIs are talking about... Market Capitalization: Let us take an example. Suppose a company X needs 100 crores capital to start a business and it decides to raise money by issuing shares. Let us assume, it d...