As these companies are relative new and you hardly have any resources to guess the potential of the company it is not wise to invest in these companies for long term. Investing in the small cap stocks are have more risk as these companies take too long to rise in the market. Mostly the small cap companies are relatively new companies that have got listed at the stock market. Generally companies with a market capital between $ 200 million and $ 2 billion are said to be small cap companies and stocks of these companies are considered in the small cal segment. Small Cap Stocks – Then there are of course the small cap companies that have small capital.
The mid cap stocks have great investment proposition as they have all the sign of rising in the market and give you good return on your investment. The stocks of these companies are categorized as the mid cap stocks. Generally those companies that have a market capital between $ 2 billion and $ 10 billion is considered to be mid cap companies. Mid Cap Stocks – The mid size businesses with moderate market capitalization are considered to be mid cap companies. This is primarily the reason that the large cap stocks are considered for including in the Nifty that is the prime index of the National Stock Exchange.
The large cap companies are mostly the companies that are in business for years and making significant growth in terms of profit and asset accumulation. At NSE as well companies with the large market capital is labeled as the large cap stocks. The stocks of these companies are categorized as the large cap stocks. Generally the companies that have a market capitalization of more than $ 10 billion are considered to have a large market capitalization. Large Cap Stocks – These are stocks that represent the biggest and most reputed companies among all the listed companies in the stock exchange. There are certain criteria that are decided by the NSE authorities to determine which stocks will fall in the large cap segment and which one will come under the small cap category. Primarily the stocks that are listed in the National Stock Exchange are divided into three different categories on the basis of the market capitalization – large cap, mid cap and the small cap. It also gives an idea of the fact that how big is the company. The market capitalization of a company is an indication of the financial position of the company. While calculating the market capitalization of a company the bonds of that company at the debt market is considered as well. Basically market capitalization is calculated by multiplying the present market price of the stock with the number of outstanding stocks in the market.
Market capitalization is the primary factor for categorically dividing the listed stocks at the stock exchanges all over the world. There are thousands of companies that are listed with the NSE and they are divided into different categories primarily depending on market capitalization. It is being speculated that the National Stock Exchange will surpass the Bombay Stock Exchange in terms of market capitalization within 2010. In fact it is the biggest in terms of daily trading and turn over. NSE or the National Stock Exchange is one of the largest stock exchanges in India. SHARETIPSINFO > Articles Directory > NSE categories and BSE categories in stock market India