Tavagapedia

Mid-cap



Key Takeaways

  1. Mid-cap refers to companies that have medium-sized capitalization. 
  2. Mid-cap companies are the companies with a market capitalization between Rs.2,000 crore to Rs.10,000 crore.
  3. Stake in a small-cap company comes with significant risk but shows more substantial growth potential.



Mid-cap refers to companies that have medium-sized capitalization. 

As per Sebi, the companies ranked 101-250 by way of market capitalization are to be termed as mid-cap stocks. Mid-cap companies are established companies that operate in industries expected to experience rapid growth and yet to reach optimum potential.

Know more

Mid-cap companies are generally in the process of expanding and scaling up. 

Mid-cap companies’ stocks are riskier than those of large-cap companies because they are not as established or have as strong fundamentals as large caps.

Mid-cap meaning

Mid-cap companies are the companies with a market capitalization between Rs.2,000 crore to Rs.10,000 crore. Mid-cap companies are generally in the developing phase, which also shows the potential to grow to a large-cap. The investment risk in mid-cap companies is higher than the large-cap.

How to increase market capitalization

There are two through which companies can increase their market capitalization.

  1. If the market value of the stock increases, then market capitalization also increases, because the market cap is nothing but the value of the total outstanding shares of a company.
  2. Companies can increase the market cap by introducing new shares. For example, if a company increases its shares from 10 million to 20 million, with a market value of RS.150 each, then the market cap of the company would be Rs.300 crore.

What is a mid-cap fund?

The mid-cap fund is an investment, where all investors explicitly invest in mid-cap company’s stocks. Stake in a small-cap company comes with significant risk but shows more substantial growth potential. In contrast, large-cap companies are considered a safer investment, where the risk rate is lower and provides stability, but the growth rate of a large-cap company is low. Therefore, many investors show interest in the stock of mid-cap companies because it allows for balance in both factors, stability, and growth rate of the company.