Definition of Market Capitalization
Market capitalization (market cap) is the total market value of a publicly traded company's outstanding shares. It is calculated by multiplying the current share price by the total number of outstanding shares.
Formula: Market Cap = Share Price × Total Shares Outstanding
SEBI categorizes Indian stocks by market cap: Large Cap (top 100 companies by market cap), Mid Cap (101st to 250th companies), and Small Cap (251st and beyond). As of 2025, India's largest companies by market cap include Reliance Industries, TCS, HDFC Bank, and Infosys.
Market cap is important for mutual fund investors because it determines which fund category a stock belongs to, and SEBI mandates minimum allocations for each category. When you buy a Nifty 50 index fund, you are buying all 50 of India's largest companies weighted by their market cap — a simple and effective way to participate in India's economic growth.