Edelweiss’ current list is an initial prediction to the official list to be released by AMFI in January 2022
Indian Railway Catering and Tourism Corporation (IRCTC), Mphasis, MindTree, Godrej Properties, Tata Power, PI Industries and SRF LTD are among the stocks that could possibly move from midcaps to largecap category in AMFI review, as per brokerage and research firm Edelweiss.
New entrants like Zomato, Nykaa (FSN Ecommerce Ventures) and PolicyBazaar (PB Fintech) could also move to the largecap stocks category in the review, which AMFI will release the official list in the first week of January 2022.
Edelweiss Alternative Research has populated potential changes to the AMFI market cap categorization. Its current list is an initial prediction to the official list to be released by the Association of Mutual Funds in India (AMFI) between January 05 to 07, 2022. The updated list, that will be announced by AMFI, will be valid from start of February till July 2022 end.
As per 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 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 recategorization does not necessarily lead to fresh inflows or outflows in the stocks as the active equity fund manager may choose to add/remove or increase/reduce weights in the stocks from their respective portfolios, depending upon their fundamental rational.
As the stocks move up from the lower categorization to higher, it leads to more visibility for stocks and thus the fund managers can look to further analyze the names and add as per their rational and scheme mandate, Edelweiss’ note highlighted.
