In the recent semi-annual evaluation of stocks by The Association of Mutual Funds in India (AMFI), 7 companies were reclassified from the mid-cap to large-cap space. The reclassified list will be applicable from August 2021 to January 2022 and fund managers have been given a time of 1 month to comply with the new changes. Due to the continuous rally in the equities market in recent months, the cut-offs for the large-cap and mid-cap categories were higher this time. The cut-off for large caps is at Rs. 37,746 crores as compared to Rs. 28,900 crore in January 2021 whereas for mid-cap the cut-off is Rs. 11,800 as compared to Rs. 8,389.68 crores in January 2021 as per the reclassification followed by AMFI.
The top 100 companies according to their full market capitalization make up the large-cap space which attributes 71.44% of the market, the mid-cap space comprises the next 101-250 companies and attributes 16.27% of the markets and the small-cap space comprises the rest of the companies attributing 12.29% of the markets.
Mid-cap to Large-cap
Large-cap to Mid-cap
Small-cap to Mid-cap
Mid-cap to Small-cap
|Adani Total Gas||PI Industries||Tata Elxsi||Metropolis Healthcare|
|NMDC||HPCL||APL Apollo Tubes||Prestige Estate Projects|
|Apollo Hospitals||Indraprashtha Gas||Kajaria Ceramics||ITI|
|Cholamandalam Investment||Petronet||Bank of Maharashtra||Mahanagar Gas|
|SAIL||Alkem Laboratories||Apollo Tyres||Procter & Gamble Health|
|Bank of Baroda||Hindustan Aeronautics||Indian Bank||CreditAccess Grameen|
|Honeywell Automation||Abbott India||Alkyl Amines Chemicals||Central Bank of India|
|Affle (India)||Akzo Nobel India|
|Blue Dart Express||IIFL Wealth Management|
|Vaibhav Global||Godrej Agrovet|
|Motilal Oswal Financial|
|AstraZeneca Pharma India|
|Bombay Burmah Trading Corp|
Stocks that have been shifted into the large-cap space such as NMDC, SAIL, Bank of Baroda, Adani Total Gas, Apollo Hospitals, Cholamandalam Investments, and Honeywell Automation gained 61%, 76%, 40%, 171%, 50%, 32%, and 13% respectively between January to June 2021. The benchmark index, NIFTY, rose by 12% in the January to June 2021 period, while NIFTY PSE (consisting of primarily government-owned stocks) witnessed a surge of 29% in the same period.
As per norms set out by the Securities and Exchange Board of India (SEBI), the reclassification is carried out every 6 months. The bi-annual reclassification will mean that fund houses will have to change their allocations towards the large, mid, and small-cap spaces according to the new list. They will have to increase or decrease exposure in the respective asset classes in order to meet the fund’s mandate.