Mazagon Dock Shipbuilders, Indian Hotels, Solar Industries, and Shree Cements are among eleven stocks that are likely to be upgraded to the largecap category in the upcoming semi-annual categorisation by Association of Mutual Funds in India (AMFI) in July.
The AMFI stock categorization will be announced in the first week of July 2025. This exercise, based on average market capitalisation data from January 1 to June 30, 2025, plays a crucial role in helping mutual fund managers align their portfolios with SEBI regulations and category mandates. The changes will take effect from August 1, 2025.
Market Cap Thresholds Likely to Drop
Due to recent stock market conditions, the average market capitalisation thresholds are expected to be lower than those seen in December 2024. The large-cap cut-off is projected to be around ₹90,800 crore, down from ₹1 lakh crore, while the mid-cap threshold is likely to be ₹29,800 crore, compared to ₹33,200 crore earlier, according to estimates by Nuvama Alternative & Quantitative Research.
Likely Upgrades to Large-cap
Among the stocks that are likely to be upgraded to large-cap status — defined as the top 100 companies by average market capitalisation — are Indian Hotels Company, Mazagon Dock Shipbuilders, Max Healthcare Institute, Solar Industries India, Shree Cements, Mankind Pharma, Apollo Hospitals Enterprises, Union Bank of India, Lupin, Jindal Steel & Power, and Dixon Technologies (India), as per Nuvama estimates.
Some of these names, such as Union Bank, Lupin, and Jindal Steel, are considered borderline entries and their final status will depend on their market capitalisation at the end of June.
Possible Downgrades from Large-cap to Mid-cap
On the flip side, several names currently in the large-cap bucket may move down to the mid-cap category, which includes companies ranked between 101st and 250th in terms of average market cap.
These likely downgrades include Rail Vikas Nigam Ltd (RVNL), Hero MotoCorp, Indian Overseas Bank, Cummins India, Swiggy, Polycab India, and Bosch Ltd. ICICI Prudential Life Insurance, Dabur India, JSW Energy, and NTPC Green Energy are also seen hovering around the threshold and may find themselves reclassified depending on final valuation data.
Mid-cap Universe May Welcome New Entrants
In the mid-cap segment, new entrants could include Godfrey Phillips India, K.P.R. Mill, Narayana Hrudayalaya, Laurus Labs, Cholamandalam Financial Holdings, Global Health, Radico Khaitan, Authum Investment & Infrastructure, Hexaware Technologies, and ITC Hotels, Nuvama said.
Potential Downgrades to Small-cap
Conversely, some companies that have seen a decline in valuations or market sentiment may move from the mid-cap to the small-cap segment, which includes all companies ranked 251st and below.
Likely candidates for this downgrade include Punjab & Sind Bank, Ola Electric Mobility, Aditya Birla Fashion and Retail, Indraprastha Gas, Inventurus Knowledge Solutions, and The New India Assurance Co. Others such as Syngene International, Deepak Nitrite, Apar Industries Ltd, and Endurance Technologies are considered borderline cases and will need to be monitored closely as the reclassification deadline approaches.
What the Reclassification Means for Fund Managers
It’s important to note that changes in categorization do not result in automatic inflows or outflows from mutual funds. However, the AMFI list is closely tracked by active fund managers, especially when making fresh allocations or rebalancing portfolios within large-cap, mid-cap, or small-cap schemes. The categorization is based on full market capitalisation, averaged over six months, and not on free-float market cap.
Final List to be Announced in Early July
With the announcement just weeks away, fund managers and investors alike will be keeping a close watch on the final market-cap data for June, which will ultimately determine the official list. While the reclassification is routine, it can have a significant impact on fund positioning and stock performance, especially around borderline entries and exits.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
