While large-cap stocks can offer stability and dividend income, mid-cap and small-cap stocks offer scope for strong capital appreciation and growth. Investors can also look to add stocks from each category to balance the risk and reward ratio of their portfolios., In this post, we are going to discuss the basics of Market Capitalization (A.k.a market cap) in the Indian Stock Market to understand large-cap, mid-cap, and small-cap companies in India. We’ll look into how companies are classified, their features, risk and return potential of all these types of companies., Small-caps have growth potential, mid-caps balance stability and expansion, and large-caps are dependable, well-established businesses. Let’s dig deeper into the article to better understand these stocks and help with informed investing., Small-cap funds: Offer high risk and high potential returns by investing in small-cap companies. Mid-cap funds: Balance risk and reward by focusing on mid-cap companies that offer significant growth but with less volatility than small-cap. Large-cap funds: Provide stability with lower risk by investing in large-cap companies. Though the returns , On the basis of market capitalisation, we can divide companies into large-cap, mid-cap and small-cap. Large-cap companies are those that have a market capitalisation of over ₹20,000 crores. These are the 100 largest companies in India, the biggest and the most stable names in the stock market., .