onomi      on epts and erminolo ies       22.33
                                                           $15 trillion. In India, the market capitalisation of
        miD-cAp funDs                                      listed companies is around $600 billion.
     Mutual funds launch sector-specific funds to               The theory is that large-cap shares have lesser
     attract investments. Similarly, they mobilise         growth potential since the turnover and profits of
     resources from investors with an objective of         large companies are already high in the context of
     investing in mid-cap shares. The Fund Manager         that particular market. On the other hand, mid-
     chooses the mid-cap shares that can become a          cap shares are considered an attractive avenue
     part of the portfolio. His job is to outperform the   for investing because their growth rate should be
     benchmark like the CNX Midcap 200 indexes in          faster. It is analogous to investing in an emerging
     terms of the returns. There are thousands of funds    market, like India, as compared to a mature
     world over that focus on investing in medium or       market. However, on the flip side, mid-cap shares
     small-cap companies.                                  are of small companies where revenue and profits
                                                           could be more volatile than large companies.
        mfbs                                               At the same time, the availability of shares for
                                                           trading in the secondary market is also limited in
     In August 2007, the Reserve Bank of India             comparison to large-cap shares.
     released a Manual on Financial and Banking
                                                                The National Stock Exchange manages an
     Statistics (MFBS), first of its kind, which works as  index called CNX Midcap 200. The objective of
     a reference guide and provides a methodological       such an index is to capture the movement in the
     framework for compilation of statistical indicators   mid-cap shares segment.
     encompassing various sectors of the economy.
                                                               merchAnt bAnking
        miD-cAp shAres
                                                           A financial world business of providing various
     There is no classical definition of mid-cap shares.   financial services other than lending such as public
     The name ‘mid-cap’ originates from the term,          issue management, underwriting such issues, loan
     medium capitalised. It is based on the market         syndication management, mergers and acquisition
     capitalisation of the stock. Market capitalisation    related services, etc.
     is calculated by multiplying the current stock
     price with the number of shares outstanding or            mezzAnine finAncing
     issued by the company. The definition of mid-cap
     shares can vary across markets and countries. In      Mezzanine financing is defined as a financial
     case of India, the National Stock Exchange defines    instrument which is a mix of ‘debt and equity’
     the mid-cap universe as stocks whose average          finance. It is a debt capital that gives the lender
     six months market capitalisation is between Rs.       the rights to convert to an ownership or equity
     75 crore and Rs. 750 crore. In the US, mid-           interest in the company. It is listed as an asset
     cap shares are those stocks that have a market        on company’s balance sheet. As it is treated as
     capitalisation of Rs. 9,000 crore to Rs. 45,000       equity in a company’s balance sheet, it allows the
     crore. In India, these shares will be classified as   company to access other traditional sources of
     large cap shares. Thus, classification of shares into finance.
     large-caps, mid-cap and small-cap is made on the           In the hierarchy of creditors, mezzanine finance
     basis of the relative size of market in a country.    is subordinate to senior debt but ranks higher
     The total market capitalisation of US markets is      than equity. The return on mezzanine finance is