The Indian equity market is broadly classified under large-cap, mid-cap, small-cap, and now the newly introduced micro-cap segments. 1/n #investing#nifty50#personalfinance#sensex
Large-cap: top 100 cos as per market capitalization (mcap)
Mid-cap: 101st to 250th company
Small-cap: 250th to 500th company
Micro-cap: 501st company & beyond (NSE-lnkd.in/gTHK28mq)
A rapidly growing economy is a result of rapidly growing companies.
2/n
With growing demand, and increasing revenues, tiny companies grow into big ones, mid-sized companies into large companies and large companies become huge.
3/n
This transition is one of the metrics of size and the underlying value of the Indian equity market, which the average market capitalization of companies can depict.
4/n
Bhaskar and I created this interesting graph which shows the trend of avg mcap of Indian cos over the last 5 years.
5/n
Key observations- 1. The average market cap of BSE 500 companies increased from ~Rs 26,000 Cr to ~Rs 36,000 Cr, roughly ~40% increase in 5 years.
2. The avg mcap of large-cap cos increased by 84%, mid-cap by 89% and small-cap by 73% in the past 5 years.
6/n
3. Since mid-cap and small-cap companies witnessed correction post-2018, the avg mcap for mid-cap companies decreased by 5% in 2019. And avg mcap of small-cap companies decreased by 18% during 2018 and 2019.
7/n
4. There was a spurt in valuations of the companies across the BSE 500 where the avg mcap of large-cap, mid-cap and small-cap cos increased (Y-o-Y) by 49%, 75% and 99%, respectively.
8/n
To mitigate the valuation volatility, we have taken the market cap data provided by AMFI (December of each year), which calculates the market cap basis avg of trailing six months.
@moneycontrolcom@SumairaAbidi@feroze_azeez@KirtanShahCFP@kayezad Insightful session👍
Does AUM matter in MF scheme?
Short Summary (do add/edit)
higher, lower is wrt avg fund size of d resp product category 1. Debt- higher the better coz some portion is kept as liquid 2. Largecap- lower the better coz higher aum funds start copying index
1/n
@moneycontrolcom@SumairaAbidi@feroze_azeez@KirtanShahCFP@kayezad 3. Smallcap- lower the better coz fund can higher bets in stocks where she has conviction. 4. The issue of AUM is more serious in equities mainly coz of liquidity. As you go from largecap to smallcap, the market cap decreases and so does the liquidity.
2/n
@moneycontrolcom@SumairaAbidi@feroze_azeez@KirtanShahCFP@kayezad 5. the largest smallcap fund has an AUM of 20k Cr and d largest smallcap company has a market cap of 16k Cr 6. if u were to decide ven to exit ur investment, a gud pointer is-start redeeming some portion of ur investments as soon as u get closer to achieving ur financial goal.n/n
The government is expected to raise >75,000 Cr by selling part of its stake in the insurance behemoth LIC.
The issue size is so big that even the word big does not seem to capture the essence of how big it is!
A thread by Bhaskar & me.
Some numbers to put things in context- 1. The biggest IPO yet was by One97 Communications (Paytm), which raised just about 18,000 Cr; LIC IPO size is at least 4x.
2. The mutual funds SIP flows/month are upwards of 9,000 Cr; LIC hopes to raise >8x of this amt in 2 days!
3. There are 10 Indian states whose budget size is less than the LIC IPO size.