Top 10 Mid Cap Stocks to invest: Why should you invest in them?

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Best Mid Cap Stocks

Mid Cap Stocks : Introduction

Mid cap stocks are known for offering better growth and returns to the investors as compared to small and large-cap stocks. But what exactly are the mid-cap stocks or companies? The companies that have a market cap between Rs. 5,000 to 20,000 crore come under the category of mid-cap companies /stocks. These stocks have higher growth potential for the investors and due to the same reason, they are favoured by both seasoned as well as retail investors. In this article, we will provide you with a list of the best mid-cap stocks for 2023 India along with other useful information on the features of midcap stocks and tips to select the right ones for your investment. Let's begin! 

Summary in Brief 

  • Features of Mid Cap Stocks
  • List of Top 10 Mid-cap Stocks
  • Reasons to Invest in Mid-cap Stocks 
  • Who Should Invest in Mid Cap Stocks?
  • Bottom Line 
  • Frequently Asked Questions 

Best Midcap Stocks for Long Term : Features

To learn about midcap funds a little bit more, let's take a look at their features. Given below are the multiple aspects of the best mid cap stocks:

Best Midcap Stocks have Better Growth Potential 

As the name suggests, mid-cap stocks are offered by medium-size companies that are neither too large nor too small. Because they have a greater potential to grow in future, their stocks also hold and offer the same potential and result in a higher ROI. 

High Return Rates to Beat Inflation by Top Midcap Stocks

Because mid-cap stocks have the potential to offer a surprisingly high rate of ROI, they can beat the inflation rate in future. 

Best Midcap Stocks : Involve Moderate risk 

Mid-cap stocks have the potential to offer higher returns but it comes with a moderate risk factor as well. The reason behind this is simple, these stocks tend to invest in tools that have a higher risk associated with them. Also, higher returns are always accompanied by higher risk in the stock market. 

Implement Both Low and High-Risk Strategies 

Based on the situation of the market, mid-cap stocks can suit both high and low-risk investment strategies, providing the investors with a great degree of growth and stability. Having these stocks in your portfolio can help you realise your financial goals and objectives very soon. 

List of Top 10 Mid-cap Stocks

Here are the top 10 mid-cap stocks you should consider adding to your investment portfolio:

Stocks Sub-sectorMarket Capitalization Latest Share Price
ABBOTINDIAPharmaceuticals Rs. 43,987Rs. 20,700.5
MPHASIS IT Services Rs. 41,480 CrRs. 2,202
COLPALFMCG - Personal CareRs. 39,892 CrRs. 1,466
GLAND PharmaceuticalsRs. 21,241.74Rs. 1,289.8
PAYTMOnline Services Rs. 40,469.7Rs. 623.25
MUTHOOTFINConsumer Finance Rs. 38,940.4Rs. 970
BALKRISINDTires and Rubber Rs. 39,572Rs. 2,047
HDFCAMCAsset Management Rs. 38,729Rs. 1,815
UBLAlcoholic BeverageRs. 37,939Rs. 1,434
ASHOKLEYTrucks and Buses Rs. 20,429.6Rs. 142

As on 24 Feb 2023, Source: Google Finance

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

Reasons to Invest in Mid-cap Stocks 

Good exposure to the best mid-cap stocks for the long term is very necessary for a healthy and well-balanced portfolio. Below are some other reasons why you need to invest in mid-cap stocks:

1. Higher Returns 

As we have mentioned several times, mid-cap stocks offer a higher rate of return as compared to other stocks. They do so because these companies have higher chances of growth and expansion from small cap phase to the large-cap phase. 

2. Moderate Risks

Mid-cap stocks involve moderate levels of risk, offering better returns than large-cap stocks and higher stability as compared to small-cap stocks. These stocks have a higher scope to raise funds with the help of credit and stay tougher in the non-favourable market conditions. 

3. Affordable

Mid-cap stocks aren't as high-priced as large-cap funds. This means you can buy them at a much more affordable price and still earn good returns. Another good thing is, that mid-cap stocks suit every type of budget. These are basically the stocks with higher potential which often get unnoticed by the large players of the market. 

4. Higher Market Reputation

Over time, mid-cap companies earn a good reputation and place in the market and place themselves smoothly on a list of profitable companies with great performance, stable history and timely dividend payouts. Moreover, they also get traded frequently which accounts for higher liquidity. And because these companies are transparent, you can easily study their past performance, current operations and management to make better investment decisions. 

Who Should Invest in Mid Cap Stocks?

Based on the advantages and features of mid-cap stocks, the following type of investors should consider investing in these stocks:

  • Investors who are looking for capital appreciation should invest in mid-cap stocks as they have the ability to grow and offer higher returns exponentially. 
  • Investors who are looking for long-term investment options. Mid-cap stocks and funds help in relapsing optimum returns in the long term. 
  • Investors who have a moderate risk appetite and thus can invest in slightly more volatile stocks than large-cap stocks. 
  • Investors who want to maintain a diversified portfolio that can lead to the desired wealth accumulation and complement other investment instruments in the portfolio.

Bottom Line 

Mid-cap stocks refer to the stocks of companies that come between large and small firms. Know that SEBI is responsible for preparing this list and these stocks offer higher risk and moderate risk levels. Further, the mid-cap stocks have better growth potential and can withstand market volatility much better than the small-cap stocks. If you're looking to earn more returns over the long term and you have a moderate risk tolerance, then you should definitely invest in the best mid-cap IT stocks in India we have mentioned in this article. 

Important things to remember:

1. Do Not Blindly Follow Hot Tips

No matter how credible the source is, never follow a stock marketing tip blindly without conducting thorough research personally. Always select the stocks after doing proper research and analysis on the performance as well as the companies. While some tips can work out to give you huge benefits, the wrong ones can push you down under the risk pretty quickly. 

2. Eliminate Loser Stocks from Portfolio 

There is absolutely no guarantee that a stock will rise after a great fall. Know that it is extremely important to be practical about what is possible and what's impossible in the stock market. So, upon realizing that a stock is performing poorly in your portfolio, accept your mistake and sell it immediately to prevent further losses. 

3. Don't Exceed Your Investment Budget Abruptly 

While it's true that long-term investments are way better than other forms of investment, you shouldn't exceed your investment budget in a haste. Instead, decide on a fixed amount and invest it across various good stocks. Rather than investing in only one stock, divide your budget evenly across multiple good-performing stocks and shares. 

Disclaimer: The securities quoted are exemplary and not recommendatory. Past performance is not indicative of future returns

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