Bandhan, Paytm and 4 other stocks downgraded to midcaps in Amfi rejig

Market


The Association of Mutual Funds of India (AMFI) has released the list of market capitalization classification for categorizing stocks into large, mid and small caps based on the six months average market capitalization i.e, from 1 July 2022 to 30 December 2022.

The classification will be the market cap benchmark for the first half of the current year (H1CY23). Equity oriented schemes focused on market cap classification will have to re-align the schemes within the next one month.

Following, it brokerages have come up with a report on the current positioning of the stocks across the different market capitalization. Brokerage firm IIFL Securities, however, noted that the re-positioning will be purely discretion based.

Stocks downgraded from largecap to midcap category list included Muthoot Finance, Paytm’s parent company One 97 Communications, Bandhan Bank, Mphasis, Gland Pharma and Piramal Enterprises.

The demerged entity Piramal Pharma made its entry in the midcap categorization.

Stocks downgraded from midcap to smallcap category included Tanla Platforms, IEX, Godrej Industries, ICICI Securities, Aavas Financers, Chambal Fertilisers and Chemical, National Aluminum Co, and The New India Assurance Company.

The market cap cut off for the large cap stood at 48,900 crore; for the midcap category, the cut off came in at 16,800 crore.

“Of the Total MCap, Large cap stocks (Top 100) attributed 69.4% vs 69.2% (July Review), Mid cap (101-250) attribute 16% vs 16.5% (July Review), Small cap (251 and beyond) attribute 14.6% vs 14.3% (July Review),” highlighted brokerage Edelweiss.

Varun Beverages, ABB India, Page Industries, Tata Elxsi, Bosch, Trent, PI Industries are the midcap stocks that have been upgraded to largecap stocks under the AMFI classification.

Meanwhile, smallcap stocks Timken India, Metro Brands, Blue Dart Express, Fine Organic Industries, UCO Bank, ZF Commercial Vehicle Control, Apollo Tyres, KPIT Tech have been moved to midcaps segment.

As per capital market regulator Securities and Exchange Board of India (Sebi), the listed stocks must be strictly categorized into baskets with a well-defined classification of largecap, midcap and smallcap stocks. This is to ensure uniformity in respect of the investment universe for equity mutual fund schemes.

Further, SEBI has also stipulated that Association of Mutual Funds of India (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 categorization based on the market capitalization provided by BSE, NSE and MSEI.

The SEBI circular on Categorization and Rationalization of Mutual Fund Schemes defines large, mid, and smallcap stocks based on the 6-month average of full market cap. The stock classification is as follows: Large Cap: 1st-100th company in terms of full market capitalization; Midcap: 101st-250th company in terms of full market capitalization; smallcap: 251st company onwards.


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