Adani Gas could soon be re-classified as a large-cap stock in the semi-annual review by the Association of Mutual Funds in India (AMFI). Brokerage and research firm Edelweiss believes AMFI’s semi-annual review will also see Apollo Hospitals, Cholamandalam Invest, and NMDC get upgraded to large caps from their current mid-cap status. AMFI reviews the market capitalization of all listed companies semi-annually and reclassifies them accordingly. AMFI expected to announce the changes in the first week of July. Fund houses are expected to rejig their portfolios based on the fresh classifications.
Edelweiss’ pick Adani Gas, now known as Adani Total Gas, has surged 269% so far this year. The current market capitalization is Rs 1.46 lakh crore. Apollo Hospitals Enterprises is up 31% so far this year and has a market capitalisation of over Rs 45,000 crore. Cholamandalam Investment, another predicted stock, has jumped 29% so far this year and has a market cap of Rs 43,000 crore. NMDC, Honeywell Automation, and Bank of Baroda are other stocks that analysts at Edelweiss expect will enter the large-cap classification. However, the brokerage firm is cautious about the latter two.
Among the stocks that will make way for the abovementioned scrips are Abbott India, Hindustan Aeronautics, Alkem Laboratories, Hindustan Petroleum, PI Industries, and Petronet LNG. All the stocks expected to be moved down to the midcap space have a market capitalization of less than Rs 40,000 crore as of today.
Further, the brokerage firm expects Tata Elexi, Kajaria Ceramics, APL Apollo Tubes, Apollo Tyres, Bank of Maharashtra, Indian Bank, Affle India, Linde India, and Alkyl Amines to be move from the small-cap classification to the midcap category. Debutants such as IRFC, Macrotech Developers, and Indigo Paints are also expected to be classified as midcaps. Some of the marquee names expected to be moved to the smallcap category include Granules India, AstraZeneca Pharma, Motilal Oswal Financial Services, Central Bank of India, IIFL Wealth Management, and Procter & Gamble Health.
Mutual fund houses get one month to align their portfolios according to the fresh classification announced by AMFI. The latest SEBI circular on multicap funds requires such funds to hold at least 25% of midcaps, largecaps, and smallcaps, in their portfolio.