What is micro cap?
Micro-Cap stocks refer to companies in India with a market capitalization of under Rs 500 crore. These stocks are considered to be highly risky investments because these companies tend to be relatively new and have limited operating histories, making it difficult to predict their future performance.
Benefit of Investing in Mid-cap
Investing in micro-cap stocks can be incredibly rewarding and beneficial. Aside from the potentially huge returns on investment that these stocks offer, investors gain access to new markets that are often difficult to enter as small-scale investors.
Moreover, being able to purchase companies at a low price allows for quick buying-selling cycles, allowing investors to capitalize on short-term ups and downs. Furthermore, there is less investor competition for these shares due to their smaller size, offering longer returns than mainstream stocks.
Risk Associated with Micro-cap Stocks
Micro stocks are considered to be highly volatile and risky investments, and they are usually not covered by professional analysts. This limits the amount of information available on these stocks, making them difficult to analyze.
Thus investing in micro-cap stocks carries a high level of risk, and investors should carefully research and evaluate these companies before making any investment decisions.