Large-cap Stocks

Stocks of the largest companies in the market such as Tata, Reliance, ICICI are classified as large-cap stocks. Being established enterprises, they have at their disposal large reserves of cash to exploit new business opportunities. The sheer volume of large-cap stocks does not let them grow as rapidly as smaller capitalized companies and the smaller stocks tend to outperform them over time. Investors, however gain the advantages of reaping relatively higher dividends compared to small- and mid-cap stocks while also ensuring the long-term preservation of their capital.

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Mid-Cap Stocks

Mid-cap stocks are typically stocks of medium-sized companies. These are stocks of well-known companies, recognized as seasoned players in the market. They offer you the double advantages of acquiring stocks with good growth potential as well as the stability of a larger company. Generally companies that have a market Capitalization in the range of 250-4000 crores are mid cap stocks

Mid-cap stocks also include companies that show steady growth backed by a good track record. They are like blue-chip stocks (which are large-cap stocks) but lack the size of those companies. These stocks tend to grow well over the long term.

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Small-cap Stocks

The stocks of small companies that have the potential to grow rapidly are classified as small-cap stocks. These stocks are the best option for an investor who wishes to generate significant gains in the long run; as long he does not require current dividends and can withstand price volatility. Generally companies that have a market Capitalization in the range of up to 250 Corores are small cap stocks.

These companies are relatively new. It is difficult to predict how they will perform in the market. Being small enterprises, growth spurts dramatically affect their values and revenues, sending prices soaring.
On the other hand, the stocks of these companies tend to be volatile and may decline dramatically.

Most Initial Public Offerings (IPO) are for small-cap companies. Aggressive mutual funds are also enthusiastic about adding small-cap stocks in their portfolios. Because they have the advantage of being highly growth oriented, small-cap stocks can forego paying dividends to investors, which enables the profits earned to be reinvested for future growth.

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Fix Deposits by Companies ... 3

Advantages:

1. Variety of Deposit Scheme to Suit individual needs.
2. Reasonable Return
3. Liquidity
4. Moderate Safety
5. Good Service & Response

Disadvantages:

1. Deposits are unsecured.

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Differences between Manufacturing companies and Finance companies,

Manufacturing Companies: Manufacturing Companies are permitted to mobilize deposits from the Public up to 25% of their net worth and up to 10% from their Share Holders. They can accept deposits for a Minimum Period of 6 Months and a Maximum of period of 36 Months. Interest will be paid on Monthly, Quarterly, Half-yearly, Annually & on Maturity. (cumulative). Investor can withdraw the deposits before the maturity. In this case he gets the interest till date, but less penalty which is usually 1% or 2 %  Finance Companies: Finance Companies are permitted to accept deposits based on their credit rating issued by any of the agencies like CARE, ICRA,CRISIL and FITCH. They can accept deposits for a minimum period of 12 months and a maximum period of 60 months. Interest will be paid on monthly, quarterly, half-yearly, Annually & on maturity. (cumulative). Deposits with highest /high rating companies are safe. They may offer an Interest rate between 9 % & 11%. Investors can avail a loan up to 75% of the amount invested and also allowed Premature withdrawal.

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