While nine midcaps are expected to be re-classified as large-caps in Association of Mutual Funds in India (AMFI)’s upcoming semi-annual review for the first half of 2022, new-age platform stocks like Zomato, FSN E-commerce, Paytm and PB Fintech will steal the limelight as they are expected to enter the large-cap category just months after getting listed.
Zomato and Nykaa-parent FSN E-commerce alone boast market capitalisation of over Rs 1 lakh crore each whereas Paytm and PB Fintech have market cap of over Rs 88,000 crore and Rs 44,000 crore, respectively.
Edelweiss Alternative Research estimates midcaps like Mindtree, SRF, IRCTC, Tata Power, Mphasis, Godrej Properties, Bharat Electronics, JSW Energy and Macrotech Developers will also be included into the large-cap category in the upcoming review. These stocks have risen anywhere between 20 and 110 percent over the past six months.
The official list by AMFI will be released between January 4 and 7, the research firm said.
“The potential names are sorted by high convictions. The market cap cut-off date to be considered by AMFI will be December 31, 2021. The official list will be valid from February 1, 2022,” the firm added.
The new large-cap entrants will replace stocks like Yes Bank, Honeywell Automation, Punjab National Bank, Biocon, Colgate-Palmolive, Bank of Baroda, Lupin, Aurobindo Pharma, NMDC, P&G Health, Cholamandalam Investment, Bosch and Bandhan Bank.
In a largely positive market, these stocks were under pressure, with the likes of Lupin, Aurobindo and Bandhan Bank falling as much as 26 percent in the past six months.
Meanwhile, recent listings like Star Health, Clean Science Tech, Nuvoco Vistas, Aditya Birla Sun Life AMC, GR Infraprojects, Aptus Value Housing and Devyani International will enter the midcap category, the firm said.
And stocks such as Happiest Minds, Central Bank of India, Gujarat Fluorochemicals, NALCO, IEX, Prestige Estates, Trident and Grindwell Norton are expected to move from the smallcap category to the midcap category.
While 19 midcap stocks will be categorised as smallcaps from February, 32 stocks including MedPlus Health, Metro Brands, Latent View and others will enter the smallcap category.
In 2017, market regulator Securities and Exchange Board of India (Sebi) had defined large, mid and smallcap companies to ensure uniformity in the investment universe for equity mutual fund schemes. It had also said that AMFI will semi-annually prepare and review the list of stocks according to the criteria specified under the circular.According to Sebi’s definition, with a six-month average market capitalisation, first 100 stocks are categorised as large cap, next 250 as midcap and rest as smallcap.