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Eight stocks, including Indian Railway Finance Corporation (IRFC), Polycab India and Macrotech Developers (Lodha), are migrating from mid-cap to large-cap universe. Meanwhile, 13 stocks will move from the small-cap universe to the mid-cap universe during the semi-annual rebalancing scheduled for next month.
“Based on the average market capitalization from July 1 to October 31, many stocks are expected to migrate between market capitalization segments. However, with about a third of the review period remaining, there will be changes to the list as stock prices change,” said analyst Brian Freitas of Periscope Analytics, who publishes on Smartkarma.
Shriram Finance, Union Bank of India, Indian Overseas Bank, Rural Electrification and Power Finance are the other stocks in pole position to reach the large-cap universe.
Meanwhile, stocks that could be downgraded from large cap to mid cap are UPL, Adani Wilmar, Indian Railway Catering and Tourism (IRCTC), Pi Industries, Bosch, Tube Investments, Hero Motocorp and Samvardhana Motherson.
The Association of Mutual Funds of India (Amfi) reclassifies stocks every six months based on their average market capitalization (mcap) during the first and second half of a calendar year. The top 100 stocks by average mcap qualify for large-cap status, the next 150 for mid-cap, and the remaining are small-cap.
The changes could affect equity portfolios with assets under management of nearly 11 trillion rupees. Among the stocks seen moving from the small-cap segment to the mid-cap segment are Mazagon Dock Shipbuilders, Suzlon Energy, Lloyds Metals, SJVN (SJVN IN), Kalyan Jewelers and CreditAccess Grameen.
Newly listed companies Jio Financial and JSW Infra will directly target the large-cap and mid-cap segments, respectively. Currently, there are 99 stocks classified as large cap after the merger of HDFC Bank and HDFC.
Rajesh Exports, Aarti Industries, Pfizer, Vinati Organics (VO IN) and Crompton Greaves Consumer are expected to downgrade their rating from midcap to smallcap.
Polycab India and Lodha are also being eyed to make it to the MSCI global index.
