Spotlight on over 40 stocks due to new m-cap rejig for mutual funds

MF industry body has prepared a revised list of stocks of largecap, midcap and smallcap companies that comprise investment universe of funds

Kumar Shankar Roy Jan 23, 2020

small and mid cap stocksThe spotlight is on over 40 stocks after the market capitalisation changes notified as part of AMFI’s new list that has been released this month.

In the new list issued by Association of Mutual Funds of India (AMFI), five scrips were promoted from midcap to largecap category. Similarly, five stocks were demoted from largecap to midcap category. As many as 12 stocks each moved from smallcap to midcap space and vice versa. In terms of additions, two new stocks found place in midcap list while in smallcaps there was addition of four scrips.

The new list is the result of a SEBI-mandated six-monthly reclassification of stocks based on market capitalisation. As per the new list, largecaps stocks have a market-cap range of Rs 26,290 crore (Muthoot Finance) to Rs 8.63 lakh crore (RIL). Midcaps have a market-cap range of Rs 8,243 crore (J K Cement) to Rs Rs 25,586 crore (MRF). Smallcaps have a m-cap range starting from Rs 8,226 crore (TTK Prestige) and lower.

The five stocks that were promoted from midcap to largecap category are Info Edge (India), Adani Transmission, REC, Kansai Nerolac and Muthoot Finance.

The five stocks that saw demotion (from largecap to midcap) are Cadila Healthcare, Indiabulls Housing, New India Assurance, Vodafone India and Yes Bank.

This promotion and demotion usually sees rotation of some equity mutual fund capital into the new largecaps, while money flows out from those who got demoted. As per norms, mutual funds are required to strictly abide by this m-cap reclassification in allocating money.

The 12 stocks that turned smallcaps from midcaps include TTK Prestige, IIFL Finance, Sterling Tech., Quess Corp, NLC India, NBCC, Century Textiles, NALCO, Jubilant Life, Indian Bank, Graphite India and Central Bank of India.

Conversely, 12 stocks that moved upwards from smallcaps to midcaps include JK Cement, PVR, Zydus Wellness, Schaeffler India, NIIT Tech., Minda Industries, ICICI Securities, Future Lifestyle, Dr Lal Pathlabs, Credit Access Grameen, Akzo Nobel, and Adani Green.

In the fresh AMFI list, two new stocks were added to midcaps namely, IRCTC and IIFL Wealth Management and four new stocks were added to smallcaps namely, CSB Bank, Gujarat Fluorochemicals, Indiamart and Spandana Spoorthy.

Let us now take a look at sectoral changes. The largecap classification has the highest exposure to BFSI (30%), Consumer (16%), IT (14%) and Oil & Gas (13%). The midcap classification has the highest exposure to BFSI (24%), Consumer (18%), Pharma (10%) and Capital Goods (9%).

In order to ensure uniformity and clarity, market regulator SEBI had in 2017 defined smallcaps, midcaps and largecaps. Largecaps are 100 top stocks, midcaps are 101st to 250th, and smallcaps are from 251st onwards to the end. Since then, AMFI, in consultation with SEBI and stock exchanges, prepares a list of stocks once in six months based on the data provided by the BSE, National Stock Exchange (NSE) and Metropolitan Stock Exchange of India (MSEI).

AMFI stocks list 2020 January

Check out the new and old lists of stocks by clicking here.

Additional read:

AMFI releases list of stocks ranked by market cap for 2019

 


Kumar Shankar Roy

Kumar Shankar Roy is contributing editor with RupeeIQ. Kumar is a financial journalist, with a functional experience of 15 years. He tracks mutual funds, insurance, pension, PMS, fixed income/debt and alternative investments markets closely. He has worked for The Times of India, The Hindu Business Line, Deccan Chronicle Group, DNA, and Value Research, among others, across different cities in India. He is deeply interested in marrying data insights with actionable opinion. He can be contacted at kumarsroy@rupeeiq.com.

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