Market capitalization is the number of shares in a company that have been issued multiplied by the current share price or CMP and is used to determine the size of a particular business. For example- 1 crore shares of ABC ltd that is trading at Rs. 100 gives a market cap of 100 crore to the respective company. On the basis of market cap, the companies in the market are categorised into the following:
Large Cap: market value of 10 billion or more, more reputation, stable growth; generally market leaders in their area.
Mid Cap: market value between 2-10 billion, emerging companies that are expected to increase their earnings; competitiveness and growth centric.
Small cap: market value 300 million-2 billion, very young companies (start ups that get listed); trying to establish themselves.