What Are Large Cap Stocks?
This is a series of explainers to educate and inform new investors. In association with Dun & Bradstreet India as knowledge partner.
Large Cap Stocks: Definition, Meaning & Basics
Large cap stocks are those stocks whose market capitalisation is generally higher than a prescribed threshold. Countries follow their own method of arriving at large cap stocks. In India, it is based on guidelines issued by the capital markets regulator, Securities and Exchange Board of India.
Large cap stocks are the stocks which feature among the 1st-100th companies in terms of full market capitalisation, according to a circular issued by SEBI in 2017. In other words, these stocks are the 100 largest in terms of market capitalisation and listed on the Bombay Stock Exchange and National Stock Exchange of India. If the stock is listed on both bourses, then the average of market capitalisation is taken into consideration to arrive at large cap stocks.
The list of Top 100 stocks gets updated every six months, based on share price data at the end of June and December of each year. This is taken care of by Association of Mutual Funds of India, or AMFI.