Five mid-caps stocks enter the large cap list

The recent market capitalisation review of stocks by AMFI has yielded interesting results. Five mid cap names moved up into the large cap league while five large cap names were reclassified as midcaps.

Cadila Healthcare, New India Assurance, Vodafone Idea, Indiabulls Housing and Yes Bank saw a drop in their market capitalisation and consequently, they were re-categorised as mid caps, as per SEBI definition.

The mid caps, which transitioned to the large cap were Info Edge India, Adani Transmission, REC, Kansai Nerolac Paints and Muthoot Finance.

IRCTC and IIFL Wealth were the new entrants in the mid cap space while CSB Bank, IndiaMART Intermesh and Spandana Sphoorty Financial were the new entrants in the smallcap space.

Mutual funds will have to rebalance their portfolio based on the new categorisation.

In October 2017, SEBI recommended uniform definitions for large cap, mid cap and small cap companies to ensure a standardised investment universe across all fund houses.

As per SEBI definition, large cap companies are the first 100 companies in terms of full market capitalization, while companies with market capitalisation from 101 to -250 companies are categorised as mid caps. Small cap companies have market capitalisation beyond 250. However, SEBI is likely to reclassify mid cap stocks as companies with market capitalisation from 101-400 companies, said sources.

Accordingly, AMFI in consultation with SEBI and the exchanges (NSE and BSE) publishes a list of stocks on half-yearly basis. After the release of this list, fund houses have a month’s time to rebalance their portfolio.

Generally, there is a slight churn in portfolios after AMFI publishes the new list.

In the new list, AMFI has identified 4992 stocks as on December 2019, an increase from 4922 stocks as on June 2019.

Click here to see the complete list.