AMFI Rejig: See what stocks are categorized as large-cap, mid-cap and small-cap

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AMFI rejig 2023

The Association of Mutual Funds in India (AMFI) issued data which categorizes equities based on their six-month average market capitalisation - in this case from 1st January 2023 to 30th june 2023. In this blog, we delve deep into what these changes are and how it affects different companies.

The half-yearly change in classification leads to certain companies to shift from being classified as mid-caps to large caps or vice-versa. These changes also act as a barometer for mutual fund houses to add or eliminate certain companies from their portfolios.

For instance, if company X has been moved from a large cap to a mid-cap, mutual fund house A will have to move the same company from a large cap fund to a mid cap fund if it invests in said company. 

AMFI Rejig: Understanding the categorization

AMFI has kept the market capitalization threshold for large cap stocks at Rs 48,900 Crores, while the cut-off for mid cap is 16,800 Crores.

Large-cap companies include the top 100 based on their market capitalization over the past six months, mid-cap companies range from the 101st to 250th position, and the rest are classified as small cap stocks.

There are a number of factors that cause the fluctuation in the stock market significantly in one direction or the other few reasons include  economic data , geopolitical events, and market sentiments.

Stocks that moved from large cap to mid cap 

The stocks that have slipped from large cap to mid cap categories are Nykaa, JSW energy , Tata Elxsi, Indus tower , Page Industries Lodha (Macrotech Developers) and info edge . Many of the names on this list reflect the market's skepticism about these companies.

Downgraded from large- to mid-cap1 Year Performance
JSW Energy48.45%
Tata Elxis-5.53
Indus Tower-22.25
Page Industries Lodha (Macrotech Developers)-16%

(Data as on July 6, 2023)

AMFI Rejig: Stocks that moved from small cap to mid cap 

Nine stocks have moved up the ladder from Small cap to Mid cap categories - Punjab & Sind Bank, Carborundum Universal, Bank of Maharashtra, Fertilizers & Chemicals Travancore, Jindal Stainless, Rail Vikas Nigam, Bharat Dynamics, New India assurance and IIFL Finance. The poster boys of the massive railway and defense stock rallies have been RVNL and Bharat Dynamics.

Upgrade from small- to mid-cap1 Year Performance
Punjab & Sind Bank131.60%
Carborundum Universal61%
Bank of Maharashtra103.48%
Fertilisers & Chemicals Travancore402.20%
Jindal Stainless265.33%
Rail Vikas Nigam306%
New India assurance47.00%
Bharat Dynamics59.86%
IIFL Finance51.50%

(Data as on July 6, 2023)

Stocks that Upgraded from mid cap to Large cap

Seven stocks have moved up the ladder from mid cap to large cap - Jindal Steel & Power, Punjab National Bank, IDBI Bank, Canara Bank, TVS Motor Co, Tube Investments and  Mankind Pharma.

Upgraded from midcap to large cap1 Year Performance
Jindal Steel & Power85.54%
Punjab National Bank96.83%
IDBI Bank,90.80%
Canara Bank69%
TVS Motor Co59.12%
Tube Investments60.14%
Mankind Pharma20.11%

(Data as on July 6, 2023)

The current evaluation shows that the share of large caps in overall market capitalisation has fallen marginally from 69.4 percent in January to 68.3 percent at the end of June. This is because of the midcap rally that occurred in April, May, and June..As equities rise up the market capitalization ladder, they become more discoverable and may draw greater domestic and international flows.

It is important to realize that being classified as large caps does not always imply that there are more flows. This category is for actively managed funds in which an active manager has the discretion to add or reduce weights or acquire or sell a stock.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.