PremiumThe Association of Mutual Funds of India (AMFI) has released the list of market capitalisation classification for categorizing stocks into largecaps, midcaps and smallcaps based on the six months average market capitalisation (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.
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.
All the fresh listing has debuted under smallcap category whereas the demerged entity Piramal Pharma made its entry in the midcap categorization.
“The market cap cut off for the Large cap is at ₹489 bn whereas the Mid cap cut off came at ₹168 bn. 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.
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.