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A segment of the equity market with a smaller capitalization than large-cap equities is known as small-cap stocks. They are frequently identified by their market capitalization, which is calculated by multiplying the share price by the total number of outstanding shares. They typically have a market capitalization of less than Rs. 5,000 crores, however, this might vary.
Small-cap stocks are meant to provide investors a chance to learn about businesses that might not be represented in large-cap indices. Small-cap firms often have higher volatility than bigger firms, but they also typically have greater growth potential. These businesses do, however, involve greater risks along with a strong potential for development.