The Association of Mutual Funds in India (AMFI) on Thursday has officially released the market cap categorization which highlights the changes in large, mid and small cap.Kanpur Investment
The large cap threshold now stands at Rs 84,300 crore up from Rs 67,000 crore in December 2023Guoabong Investment. Meanwhile, for the mid cap the cut-off has risen to Rs 27,600 crore compared to Rs 22,000 crore previously.
The large cap which are the top 100 now represent 63.6% which is down from 64.4% in December 2023Chennai Stock. The mid caps (101-250) now account for 18.2% indicating an uptick from 17.8% in December. The small cap’s (251 and beyond) make up around 18.2%, showing an increase from 17.8% in DecemberAhmedabad Wealth Management. These changes have been perfectly in line with Nuvama Alternative predictions.
The stocks which were mid caps and are now large cap include Hero Motocorp, Zydus Lifesciences, NHPC, BHEL, Bosch, JSW Energy, and Samvardhana Motherson. Around seven stocks will now be mid cap from large cap which includes SRF, ICICI Prudential Life, Polycab India, Marico, Berger Paints, SBI Cards, and ICICI Lombard.
Some stocks like HUDCO, BSE, Hitachi Energy, Blue Star will now come under mid cap category which were earlier under small cap. On the other hand, stocks such as Relaxo Footwear, Piramal Enterprises, Vedant Fashions, Zee Entertainment, Sun TV Network, The Ramco Cement will now be classified as small caps from mid caps earlier.
Around 32 stocks have been newly added in the small cap space which includes Aadhar Housing Finance, Juniper Hotels, Gopal Snacks, Awfis Space Solution, Epack Durable, Mukka Proteins, SRM Contractors.
The recategorization does not necessarily lead to fresh inflows or outflows in the stocks as the active equity fund manager may choose to add/remove or increase/reduce weights in the stocks from their respective portfolios, depending upon the fundamental and non-quantitative rationale.
The recategorisation of stocks helps but not necessarily immediately in terms of flows. As the stocks move up from the lower categorization to higher (example- small-cap to midcap and midcap to large cap), it leads to more visibility for stocks and thus fund managers can look to further analyse the names and add as per their rational and scheme mandate, said the release.
The recategorisation of stocks happens on a half yearly basis and the current list will be valid from August 2024 to January 2025.
Lucknow Investment