AMFI rejig: RVNL to exit, Mazagon Dock & Solar Ind may enter large cap category, says Nuvama

The Association of Mutual Funds in India (AMFI) is preparing to release its semi-annual categorisation of stocks in the first week of July. According to Nuvama Institutional Equities, the large-cap threshold this time is expected to be around Rs 90,800 crore, slightly lower than the Rs 1 lakh crore cut-off during the December 2024 review. The mid-cap threshold is likely to hover around Rs 29,800 crore, compared to Rs 33,200 crore previously.

Based on these estimates, several stocks are poised to move up into the large-cap category. Among them are defence sector players like Mazagon Dock Shipbuilders and Solar Industries, Tata Group's Indian Hotels Company (IHCL), and healthcare companies including Apollo Hospitals, Max Healthcare Institute, Lupin, and Mankind Pharma. Other potential large-cap additions include Union Bank, Shree Cement, Jindal Steel & Power (JSPL), and Dixon Technologies.

On the other hand, Rail Vikas Nigam (RVNL) may be removed from the large-cap list, along with companies such as Hero MotoCorp, Indian Overseas Bank, Cummins India, Swiggy, Polycab India, Bosch, ICICI Prudential Life Insurance, Dabur India, JSW Energy, and NTPC Green Energy. Some of these names are considered borderline cases. The AMFI list would be valid from August 2025 to January 2026.

Several stocks are also expected to enter the mid-cap category. These include Godfrey Phillips India, K.P.R. Mill, Narayana Hrudayalaya, Laurus Labs, Cholamandalam Financial, Global Health, Radico Khaitan, Authum Investment & Infrastructure, Hexaware Technologies (a new entry), and ITC Hotels (also a new entry). Again, some of these are borderline candidates.

Meanwhile, a few stocks may be downgraded from mid-cap to small-cap. These include Punjab & Sind Bank, Ola Electric Mobility, Aditya Birla Fashion and Retail, Indraprastha Gas, Inventurus Knowledge Solutions, The New India Assurance Company, Syngene International, Deepak Nitrite, Apar Industries, and Endurance Technologies—many of which are considered to be on the borderline.

Stock recategorisation can be beneficial, though it does not always lead to immediate inflows. When a stock moves from a lower category to a higher one, it gains greater visibility in the market. Fund managers typically conduct further analysis before deciding to include such stocks in their portfolios, ensuring the decision aligns with their investment rationale and the mandate of the scheme.