In the next three months, AMFI would be coming out with its list of semi annual categorisation where it will make potential changes to largecap, midcap and smallcap categories for the first half of calendar 2024. As per Nuvama's early predictions, Polycab India, Macrotech Developers, Power Finance Corporation (PFC) and IRFC are among stocks that could be moved from midcap to largecap categories. As per the brokerage, Mazagon Dock Shipbuilders, Suzlon Energy and SJVN are among key midcap contenders.
IRCTC, Adani Wilmar, UPL, PI Industries, Bosch and Hero MotoCorp are among largecap companies that are likely to categorised as midcaps, suggested the study by Abhilash Pagaria, Head, Nuvama Alternative and Quantitative Research.
Also many stocks such as Pfizer, Laurus Labs, Vinati Organics, Atul, Aarti Industries, Bharat Dynamics could be moved to smallcap from midcap categories. Jupiter Life, Samhi Hotels, Yatharth Hospital, Yatra Online, ideaForge Technology are among companies that may enter AMFI's smallcap category.
The official changes would be declared by AMFI in the first week of January 2024, which would be applicable from February to July 2024. Nuvama said that its analysis is based on initial calculations and that it would come out with more updates till December end.
Nuvama noted that the change in categorisation does not lead to incremental inflows or outflow, adding that active mutual fund managers keep an eye on the list while taking fresh position in stocks in different category of schemes.
As per a circular released by market regulator Sebi in October 2017, the listed stocks must be strictly categorised into baskets with a well-defined classification of largecap, midcap and small cap shares.
This was to ensure uniformity in respect of the investment universe for equity -based mutual fund schemes. Sebi has also stipulated that AMFI shall prepare the list of stocks in this regard. Accordingly, AMFI in consultation with SEBI and stock Exchanges, prepares the list of stocks with categorisation based on the market capitalization provided by BSE, NSE and MSEI, Nuvama said.