Bharat Heavy Electricals Ltd., Hero Moto Corp, NHPC, JSW Energy, Zydus Lifesciences, Bosch, and Cummins India are expected to become large-cap stocks in the upcoming AMFI market cap classification, which is due on 1 August 2024.
Want to know how this classification works?
Here are all the details.
Expected Cut-offs by AMFI
AMFI comes up with fresh cut-offs for classifying stocks according to market capitalization periodically. In this upcoming semi-annual categorization schedule of AMFI, the cut-off for the large cap category is anticipated to be around ₹ 84000 crore which was around ₹ 67000 crore during the half-year ended on 31 December 2023.
Now coming to the mid-cap category, for this the cut-off is expected to be around an average market cap of ₹ 27500 crore. The previous cut-off was ₹ 22000 crore during the six months ended on 31 December 2023.
As per Nuvama, AMFI will come up with its semi-annual classification of the stocks on 1 August 2024. The basis of this categorization is the first 100 stocks as per market capitalization are large-cap stocks, followed by the next 150 stocks, which are mid-cap, and the stocks ranking beyond 250 as per market cap are categorized as small-cap.
Current Market Capitalization and Returns
Currently, the market capitalization of the seven stocks mentioned above is above ₹ 1 lakh crore. In the past 12 months, these stocks have rallied between 79% to even a whopping 242%. Amongst these seven stocks, two are state-run organizations, which are BHEL and NHPC, which turned multibagger in the past 12 months. BHEL delivered an astonishing 242% return while NHPC offered a 120% return during this one year. JSW Energy, on the other hand, has offered the second-highest return amongst these seven stocks which is 158% during the same period, and Cummins India delivered a 112% return.
From Large cap to Midcap
If seven stocks are to be added to be large-cap category, then seven stocks will be demoted as well, won’t it? Amongst the stocks whose market capitalisation may fall short of the expected cut-offs include Berger Paints whose market cap declined by 10% between 1 January to 30 June 2024. Then there is SBI Card with a 14% decline and SRF with an 8% decline. Under this radar, Polycab India, and ICICI Lombard may also come as their market cap is on the edge and may fall short of the cut-off. However, these two stocks have outperformed the Nifty 50 during the preceding six months starting 30 June 2024.
Midcap & smallcap Transitions
There are around 18 stocks, which witnessed an increase in their market cap and may enter the mid-cap category on 1 August 2024. Amongst these 18 stocks, some of the known names include Bharti Hexacom, which was listed just this April. Then it may include HUDCO, Tata Investment Corporation, IRB Infra Developers, Hitachi Energy, Hindustan Copper, Bharat Dynamics, Motilal Oswal Financial Services, ITI, Blue Star, and others.
On the contrary, the 18 stocks that may be dumped from the mid-cap to the small-cap category include Zee Entertainment, IIFL Finance, Piramal Enterprise, Credit Access Grameen, Hatsun Agro, Vedant Fashion, Glenmark Pharma, Sun TV Network, Relaxo Footwear, The Ramco Cement, and more.
Conclusion
The anticipated amfi market cap classification can play an important role in the share price movement of these stocks, so keeping an eye on these stocks can be helpful if investors are planning to include them in their portfolio, or already have them in their portfolio.
Source: https://economictimes.indiatimes.com/
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