Newly listed Life Insurance Corporation of India (LIC) and Adani Wilmar stocks have been ranked as largecaps, according to the Association of Mutual Funds in India’s (AMFI) latest stock categorisation. AMFI has further moved shares of Adani Power, Cholamandalam Investment and Finance, Bank of Baroda, Hindustan Aeronautics Ltd (HAL), and Bandhan Bank from the midcap category to the largecap one. AMFI prepares a list of stocks, categorising all listed scrips into largecap, midcap, and smallcap, semi-annually. Active equity fund managers shape their portfolios on the basis of AMFI’s categorisation of stocks.
New largecap stocks
The market cap cut-off for the largecap in the new list is at Rs 475 billion. “Of the total market cap, largecap stocks (top 100) attribute 69.2% vs 68.8% (Jan Review),” Edelweiss said in a note. Stocks that have been moved to the largecap category from the midcap category include Adani Power, Cholamandalam Investment and Finance, Bank of Baroda, Hindustan Aeronautics, and Bandhan Bank. Along with these LIC and Adani Wilmar have also been added to the largecap category.
Fresh Midcap additions
AMFI has downgraded IDBI Bank, HDFC AMC, Godrej Properties, Steel Authority of India (SAIL), Zydus Lifesciences, Jubilant Foodworks, and PB Fintech (Policybazaar) from the largecap category to the midcap. The cut-off for the midcap came at Rs 164 billion. “The fresh listings which directly got added in the midcap cap category are Vedant Fashions and Delhivery. Whereas, Motherson Sumi Wiring got demerged from its parent Motherson Sumi Systems Ltd,” said Edelweiss.
Upgraded from the smallcap category to the midcap category are Tata Tele Maharashtra, KPR Mill, Tanla Platforms, Poonawala Fincorp, Phoenix Mills, SKF India, and Chambal Fertilizers.
Stocks that get smallcap tag
AGS Transact Technologies, UMA Exports, Veranda Learning, Hariom Pipes, Campus Activewear, Rainbow Children’s Medicare, Prudent Corporate Advisory Services, Venus Pipes, Paradeep Phosphates, and Ethos Ltd have been added to the smallcap category. Meanwhile, Nuvoco Vistas, Aditya Birla AMC, UCO Bank, Natco Pharma, GR Infraproejects, Indiamart Intermesh, Happiest Minds, Ajanta Pharma, and Sanofi India have been dropped from the midcap category to the smallcap list.
AMFI categorises stocks in largecap, midcap, and smallcap categories to ensure uniformity in respect of the investment universe for equity mutual fund schemes. However, it is not necessary that a change in category result in inflows to stock. “There’s no hard-and-fast rule. An active equity fund manager may choose to add/remove or increase/reduce weightings on stocks from their respective portfolios, depending upon their fundamental rationale,” Edelweiss said.