AMFI will review its semi-annual index categorisation in the first week of July and if we go by early predictions by Nuvama Institutional Equities, stocks such as YES Bank, Jindal Steel & Power (JSPL), Canara Bank, IDBI Bank and TVS Motor have chances to move into the largecap category. At present, these stocks are ranked anywhere between 106 and 120. Top 100 stocks based on six-month average market capitalisation are considered in the largecap category.
Tata Elxsi, FSN E-Commerce (Nykaa), JSW Energy, Page Industries, Indus Towers and Zomato are among largecaps that have good chances to slip into the midcap category from largecap at present, as per Nuvama.
Punjab & Sindh Bank, Bank of Maharashtra, New India Assurance, Carborundum Universal, IIFL Finance, FACT, IRB Infra and Bharat Dynamics are some of the smallcap stocks that can be moved to the midcap category, as per Nuvama. Stocks that are ranked 101st-250th based on six-month average m-cap move to the midcap category.
Stocks such as Piramal Pharma, Tata Teleservices, Nippon Life, Fine Organics, Clean Science, Gillette India and Blue Dart can slip into the smallcap category.
Divgi Torqtransfer Systems, Radiant Cash Management, Global Surfaces and Sah Polymers could join the smallcap list.
One must note that a change in market cap categorisation does not lead to incremental inflows or outflow.
That said, active mutual fund managers keep an eye on the list while taking fresh/modifying positions in stocks in different categories of schemes.
“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,” Nuvama said.
The brokerage said that recategorisation helps, but not necessarily immediately in terms of flows. As the stocks move up from lower categorisation to higher (say small-cap to mid-cap and midcap to large-cap), it increases their visibility.
Fund managers, Nuvama said, typically further analyse such stocks and add them as per their rationale while complying with the scheme mandate.
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