Reading Financials3 min read
Large-cap, mid-cap and small-cap explained
Companies are grouped by size. That grouping is a rough proxy for stability, growth potential and risk.
Investors sort companies into buckets by market cap: large, mid and small. In India, SEBI defines these by rank: the top 100 companies by market cap are large-caps, the next 150 are mid-caps, and the rest are small-caps.
The trade-off
Large-caps tend to be more stable but slower-growing. Small-caps can grow fast but swing hard and can be harder to sell in a hurry. Mid-caps sit in between. None is 'better'; they simply carry different risk.