LIC of India and Adani Wilmar stocks will likely be new entrants in the large cap stocks category in the next review by AMFI (Association of Mutual Funds in India), IIFL Securities said in a report. Currently, LIC’s total market capitalisation stood at Rs 4.22 lakh crore. However, at the offer price of Rs 949, LIC’s market capitalisation was at Rs 6.02 lakh crore. According to BSE data, the insurer is the seventh most valued firm in terms of market capitalisation, followed by SBI (State Bank of India) with a market capitalisation of Rs 4.02 lakh crore.
AMFI is likely to release the new categorisation in the first week of July 2022. IIFL Securities said that the stocks have been sorted on the basis of current allocation in the respective category and weight in the benchmark.
Likely to move from mid-cap to large-cap
IIFL Alternative Research has picked five stocks that could be reclassified at large cap from midcap. These include Adani Power, which has a market cap of Rs 1 lakh crore, and Cholamandalam Investment and Finance Company, which has a market cap of Rs 52,827 crore. Further, Bank of Baroda with a market cap of Rs 50.809 crore along with Bandhan Bank, (market capitalisation of Rs 45,416 crore) and Hindustan Aeronautics (mcap of Rs 59,980 crore) are also expected to make the cut.
Likely to slip to mid-cap from large-cap
Stocks that could slip down the order to the mid-cap category from large-cap include PB Fintech (PolicyBazaar), which has a market capitalization of Rs 27,723 crore. PB Fintech’s share price has tanked 35.27 per cent in 2022 so far. IDBI Bank, Zydus Lifesciences, Jubilant FoodWorks, Steel Authority of India (SAIL), Godrej Properties, and HDFC AMC are also expected to be brought down to the mid-cap category. All the stocks mentioned above have fallen up to 38 per cent so far this year. IIFL Alternative Research also expects newly listed Delhivery, Vedant Fashions (Manyavar), along with Motherson Sumi Wiring entering the mid-cap basket.
From small-cap to mid-cap
Tata Teleservices (Maharashtra) is among the stocks that are currently categorised as small-caps but could be moved to the mid-cap basket. Others on the list include SKF India, KPR Mill, Tanla Platforms, Poonawala Fincorp, Phoenix Mills, and Chambal Fertilisers.
From mid-cap to small-cap
13 stocks have been identified by IIFL Alternative Research that could potentially be downgraded to the small-cap category from the current mid-cap basket. Some of these are Gillette India, Sanofi India, Aptus Value Housing Finance, Alkyl Amines Chemicals, Nuvoco Vistas, UCO Bank, Aditya Birla AMC, Natco Pharma, Happiest Minds, Ajanta Pharma, GR Infraprojects among others. Further, Campus Activewear, Rainbow Children’s Medicare, Eureka Forbes, eMudhra, Aether Industries, AGS Transact technologies, Paradeep Phosphates, Prudent Corporate Advisors, Ethos, Veranda Learnings, and Venus Pipes are among the newly listed companies that are likely to get the small-cap categorisation.
The list of stocks under large-cap, mid-cap, and small-cap basket is prepared by AMFI on a semi-annual basis in consultation with SEBI, BSE, and NSE. Large-cap companies are the top 100 companies listed on the bourses while midcap companies include the 101st to 250th company by market capitalization. The rest are small-caps. It is important to note that categorisation or re-categorisation of stocks does not necessarily mean inflow of funds.