Mid-cap stocks like Mazagon Dock Shipbuilders Ltd., Indian Hotels Co., and Solar Industries Ltd. could potentially be recognised as large-cap, while Hero MotoCorp, Polycab India Ltd. and Swiggy Ltd. could be demoted to mid-cap from large-cap.
The Association of Mutual Funds in India on Friday unveiled its updated market categorisation list for the second half of 2025 that will come into effect from Aug. 1, 2025, to Jan. 31, 2026.
Notably, the share of large-cap and mid-cap stocks in the market has fallen, while small-caps have increased.
The updating of market composition by AMFI directly influences active fund managers, who then adjust their schemes according to their mandates. This process also leads to the reorganisation of stocks across different market capitalisation categories.
According to brokerage firm Nuvama, large-cap stocks — the top 100 companies based on market capitalisation — now account for 61.3% of the market, marginally lower from 62.1% in December.
Mid-cap stocks (ranked 101st to 250th) experienced a slight decrease in their market share, now constituting 19.2%, down from 19.6% in the December review.
Conversely, small-cap stocks were the only category to see an increase, rising by 120 basis points to represent 19.5% of the market.
One basis point is one-hundredth of a percentage point.
New Large Cap Entrants
Given these changes, certain stocks could be added to the large-cap category from mid-cap and vice versa. This is crucial because an active fund manager whose mandate is restricted to large-cap stocks would be required to remove any stock that no longer fits that classification from their scheme.
In such potential rejig, stocks like Hero MotoCorp, Swiggy, Bosch and Polycab could be changed to mid-cap from large-cap. On the other hand, Indian Hotel, Solar Industries, and Mazagon Dock could be recognised as large-cap and attract funds.
Max Healthcare Institute Ltd., Shree Cement Ltd., Apollo Hospitals Enterprise Ltd., Jindal Steel and Power Ltd., Mankind Pharma Ltd. and Lupin Ltd. are other potential large-cap entrants.
New Mid Cap Entrants
Nuvama also expects counters like Godfrey Phillips India Ltd., Radico Khaitan Ltd., Multi Commodity Exchange of India Ltd., Lauras Labs Ltd., Narayana Hrudayalaya Ltd., Cholamandalam Investment and Finance Co., Authum Investment & Infrastructure Ltd. and Global Health Ltd. to move from the small-cap to the mid-cap category.
Hexaware Technologies Ltd. and ITC Hotels Ltd. are other potential candidates.
Some stocks could be recognized as small-caps from mid-caps currently. These include Ola Electric Mobility Ltd., Punjab National Bank, Deepak Nitrite Ltd., Inventurus Knowledge Solutions Ltd., Syngene International Ltd., Apar Industries Ltd., Endurance Technologies Ltd. and Aditya Birla Fashion and Retail Ltd.
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