From IRFC to Polycab India, eight stocks move up the ladder to largecap

Eight stocks, including Indian Railway Finance Corporation (IRFC), Polycab India and Macrotech Developers (Lodha), are migrating from midcap to largecap universe. Meanwhile, 13 stocks will move from the small-cap universe to the mid-cap universe during the semi-annual rebalancing taking place next month.

“Based on the average market capitalization from July 1 to October 31, many stocks are expected to migrate between market capitalization segments. With about a third of the reporting period remaining, there will be changes in the list as share prices move,” said analyst Brian Freitas of Periscope Analytics, which 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 penetrate the largecap universe.

Meanwhile, stocks that could be downgraded from largecaps to midcaps include UPL, Adani Wilmar, Indian Railway Catering and Tourism (IRCTC), Pi Industries, Bosch, Tube Investments, Hero Motocorp and Samvardhana Motherson.

The Association of Mutual Funds in India (Amfi) reclassifies stocks every six months based on their average market capitalization (mcap) during the first and second six-month periods 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 caps.

The changes could impact equity portfolios with assets under management of nearly Rs 11 trillion. Stocks moving from the smallcap to midcap segment include Mazagon Dock Shipbuilders, Suzlon Energy, Lloyds Metals, SJVN (SJVN IN), Kalyan Jewelers and CreditAccess Grameen.

The newly listed companies Jio Financial and JSW Infra will make direct inroads into the largecap and midcap segments respectively. Currently, there are 99 stocks classified as largecap after the merger of HDFC Bank and HDFC.

Rajesh Exports, Aarti Industries, Pfizer, Vinati Organics (VO IN) and Crompton Greaves Consumer are expected to be downgraded from midcaps to smallcaps.