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WHAT IS MARKET CAPITALISATION AND WHY IT IS IMPORTANT IN INVESTING?

Market capitalisation or market cap is defined as the current market price of a stock multiplied by the number of shares outstanding. Companies with larger market caps are usually larger in size compared to a company with smaller market cap. Larger companies have the potential of more stable opportunities and are less volatile as compared to smaller companies. Further, Smaller Companies on the other hand, may have more opportunities to grow their earnings faster than large caps, but are more vulnerable to business cycles.

What are different market capitalisation segments?

According to the market regulator, Securities and Exchange Board of India (SEBI), stocks can be classified into three market cap segments:

  1. Large cap: The top largest 100 companies by market capitalisation are classified as large cap companies.
  2. Mid cap: SEBI categorizes 101st to 250th companies by market capitalisation size as midcap companies. There are 150 mid cap stocks.
  3. Small cap: 251st and smaller companies by market capitalisation are classified as small cap companies by SEBI.

An Investor Education & Awareness Initiative by HSBC Mutual Fund

Visit https://grp.hsbc/KYC w.r.t. one-time Know Your Customer (KYC) process, complaints redressal process including SEBI SCORES (https://www.scores.gov.in). Investors should only deal with Registered Mutual Funds, to be verified on SEBI website under Intermediaries/Market Infrastructure Institutions (https://www.sebi.gov.in/intermediaries.html). Investors may refer to the section on ‘Investor Education’ on the website of HSBC Mutual Fund for the details on all ‘Investor Education and Awareness Initiatives’ undertaken by HSBC Mutual Fund.

Document intended for distribution in Indian jurisdiction only and not for outside India or to NRIs. HSBC MF will not be liable for any breach if accessed by anyone outside India. For more details, click here / refer website.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Risk Warning
The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested.