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From Small-cap to Large-cap

Companies that have moved up or down the large-, mid- and small-cap rungs of the market-cap ladder over the last ten years

At Value Research, our methodology of categorising a company as large, mid or small cap on the basis of market capitalisation is not fixed. It is based on relative market cap, which changes with the market movement. This means that when the overall market rises, the cutoff also rises. This also means that a company moving at the same pace as the market's will remain at the same rank in terms of being a large, mid or small cap. Therefore, for a company to move up the ladder to a higher category (for example, from small cap to mid cap), the stock has to extraordinarily outperform, and, similarly, underperformance too should be significant enough to warrant a demotion.

We checked the companies which have changed their market-cap ranks and have changed from being either a small cap to a large cap any time in the last ten years or a large cap to a small cap. We found four companies which have grown extraordinarily to become large caps from small caps. These are: Aurobindo Pharma, Eicher Motors, IndusInd Bank and United Breweries. The companies which once boasted of being large caps and now have turned to meager small caps are: Bajaj Hindusthan Sugar, BF Utilities, Financial Technologies, HDIL and MTNL.

Following is the journey of the mentioned companies in terms of capitalisation ranks over the last ten years.