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Thanks to the mind-blowing rally in the equities, the market capitalisation cut-off for large-cap classification by the Association of Mutual Funds in India has zoomed 34 per cent to ₹66,700 crore as on date from ₹49,700 crore in July. Similarly, the market capitalisation cut-off for mid-cap classification has risen to ₹21,900 crore against ₹17,400 crore in July. The bellwether Sensex had rallied 3,401 points to 69,929 on Monday from 66,528 points in July.
As per SEBI norms, the first 100 stocks in terms of market-cap are classified as large-cap, 101-250 stocks are termed as mid-cap and the remaining come under small-cap classification.
AMFI releases the list of stocks every six months under large-, mid- and small-cap classification based on the movement in their market-cap and mutual fund schemes have to invest funds of schemes based on market capitalisation. The fresh list to be issued by AMFI in January, will be valid from February to July.
Also read: Broker’s Call: Aditya Vision (Buy)
Shriram Finance, Indian Overseas Bank, Jio Fin Serv, Power Fin Corp, IRFC, Macrotech Dev, Polycab, REC and Union Bank are the likely entrants into the large-cap space, according to Nuvama Wealth Management research.
Abhilash Pagaria, Head, Nuvama Alternative & Quantitative Research, said an upgrade in classification will not lead to immediate fresh fund flow into these company stocks, but the active mutual fund managers keep an eye on the list while taking fresh or modifying position in stocks in different category of schemes.
Laggards
Some of the laggards that will move out of large-cap space include UPL, Adani Wilmar, IRCTC, PI Industries, Bosch, Tube Investments, Samvardhana Motherson and Hero Motocorp.
Potential new entrants into the mid-cap space include recently listed Tata Technologies and JSW Infrastructure besidesothers such as Mazagaon Dock, Suzlon Energy, Lloyds Metal, SJVN (earlier Satluj Jal Vidyut Nigam), Kalyan Jewellers, KEI Inds, CreditAccess Grameen, Exide Inds, Ajanta Pharma, Nippon Life, Narayan Hrudayalaya and Emami,
Some of the stocks that will be downgraded from mid- to small-cap include Rajesh Exports, Pfizer, Aarti Industries, Vinati Organics, Crompton Greaves, Whirlpool, Atul, Navin Fluoro, Laurus Labs, Sumitomo Chemicals, Bharat Dynamics, Aditya Birla Fashion, Bata India and Kajaria Ceramics.
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