The market capitalisation (mcap) threshold for a stock to qualify as largecap and midcap has risen to Rs 84,325 crore and Rs 27,564 crore, following the latest rebalancing exercise by the Association of Mutual Funds in India (Amfi), an industry group.
This threshold has jumped around 25 per cent from Rs 67,000 crore and Rs 22,000 crore, respectively, after the end of the previous rebalancing in December 2023.
Domestic equity markets had clocked their best half-yearly performance since 2021.
During January-June 2024 (H1 CY24), benchmarks Nifty 50 and BSE Sensex rose 10.5 per cent and 9.4 per cent, respectively. Meanwhile, the BSE Midcap and Smallcap indices outperformed, gaining 25 per cent and 22 per cent, respectively.
When the framework was first introduced in 2017, the mcap threshold for large and midcaps was Rs 29,000 crore and Rs 8,500 crore, respectively.
After the latest rebalancing, seven stocks have moved from the midcap bucket to largecap following their outperformance.
These include Hero Motocorp, Zydus Lifesciences, JSW Energy NHPC, Bhel, Samvardhana Motherson International and Bosch.
The stocks that made way for them are Polycab India, ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance Company, SRF, Marico, SBI Cards and Payment Services and Berger Paints.
The sharp swing in the stock prices over the past few months —amid the election-related volatility — has led to higher churn than usual.
Also, it made it challenging for analysts to predict the stocks that will see an upgrade or downgrade.
About 19 new stocks have been included in the midcap basket. They include newly-listed Bharti Hexacom and Go Digit General Insurance.
Hudco, Bharat Dynamics, IRB Infra and MRPL are among the 17 stocks that have been upgraded from smallcap to midcap.
KPR Mills, Tata Chemicals, Narayana Hrudayalaya and Sun TV Network have moved from midcap to smallcap.
According to IIFL Alternative, actively-managed largecap schemes have assets under management (AUMs) of Rs 3.23 trillion. The large and midcap scheme category is Rs 2.24 trillion.
Meanwhile, the midcap and multicap categories have AUMs of Rs 3.28 trillion and Rs 1.4 trillion, respectively.
Based on the churn in stocks, fund managers handling these shares could rejig their holdings.
Typically, stocks that migrate from midcap to largecap and smallcap to midcap tend to outperform.
First Published: Jul 05 2024 | 5:49 PM IST
