Which newly listed stocks may see changes in Amfi stock reclassification?

Amfi stock rejig: Nuvama Alternative expects Vishal Mega to enter mid-cap category and One Mobikwik to enter small-cap category, based on potential post listing m-cap expectations

AMFI semi-annual stock recategorisation: The Association of Mutual Funds in India (Amfi) is expected to announce its semi-annual stock recategorisation, likely in the first week of January 2025.

 

Ahead of the announcement, Nuvama Alternative and Quantitative Research has released a list of "potential" changes in market-capitalisation (market-cap or m-cap) recategorisation of various stocks, including Rail Vikas Nigam, ICICI Prudential Life Insurance, Indus Towers, Hyundai Motors India, Swiggy, Bajaj Housing Finance, Adani Total Gas, IndusInd Bank, IDBI Bank, Waaree Energies, and Ola Electric Mobility among others.

 

Amfi semi-annual stock recategorisation: What to expect?

According to Nuvama Alternative and Quantitative Research, Amfi -- the Mutual Fund industry body – may announce its semi-annual stock recategorisation in the first week of January 2025. Ahead of the announcement, the research house’s potential list of changes, it said, may serve as a reference for active domestic fund managers to make changes to the portfolios under their management.

 

 

"That said, an active equity fund manager may choose to add/remove or increase/reduce weightings on stocks from their respective portfolios, depending upon their fundamental rationale. Further, while recategorisation helps (in)flows, there may not necessarily be immediately flows," said the note by authored by Abhilash Pagaria, Head – Alternative & Quantitative Research, Nuvama Alternative and Quantitative Research.

 

Nuvama Alternative said it has taken the cut-off period from July 1, 2024, to December 31, 2024, with the announcement expected in the first week of January. The categorisation will take effect from February 1, 2025.

 

"Based on current average market-cap levels, we anticipate the large-cap cut-off to be approximately Rs 1 trillion (compared to Rs 84,000 crore as of June 2024) and the mid-cap threshold to be around Rs 32,900 crore (compared to Rs 27,500 crore as of June 2024)," the research house said.

 

Which stocks may see changes in Amfi semi-annual stock recategorisation review?

Nuvama Alternative Research expects CG Power, Rail Vikas Nigam (RVNL), ICICI Prudential, and Polycab India to enter the large-cap universe from mid-cap status. While it also anticipates Indus Towers, Cummins India, and Info Edge to enter the large-cap category, the research house has kept them as 'border line names' (BLN).

 

Further, GE T&D India, and 360 One WAM are expected to move from small-cap to mid-cap categories. It has kept Kaynes Tech, and Aditya Birla Fashion and Retail under BLN.

 

It also expects Vishal Mega Mart to likely enter the mid-cap category upon listing, based on pre-emptive m-cap expectations.

 

On the flipside, Nuvama Alternative and Quantitative Research said that Adani Total Gas, NHPC, Shree Cements, IDBI Bank, Bharat Heavy Electricals (BHEL), Union Bank of India (UBI), Canara Bank, and Mankind Pharma may move from large-caps to mid-caps.

 

IndusInd Bank, Jindal Steel & Power, and Apollo Hospitals Enterprises may or may not see any changes as they are placed under BLN.

 

That apart, stocks likely moving from mid-cap category to small-cap category may include ITI, ZF Commercial, Delhivery, Poonawalla Fin, Hindustan Copper, Motherson Sumi Wiring, Global Health, Gland Pharma, and Bandhan Bank. Mangalore Refinery Petrochemicals, Go Digit General Insurance, and Star Health and Allied Insurance are within border-line expectations.

 

While most of these names/re-categorisations were announced in the research house’s November 29 note, it has increased the list of small-cap entrants from the newly listed space. 

Source: Nuvama Alternative and Quantitative Research report

Hyundai India, Swiggy: Newly listed stocks' classification

According to Nuvama Alternative, newly listed Hyundai Motors India, NTPC Green Energy, Bajaj Housing Finance, and Swiggy may enter the large-cap category, while Waaree Energies, Premier Energies, and Ola Electric may enter the mid-cap category.  

 

Brainbees (FirstCry), Afcons Infra, Sagility India, Raymond Lifestyle, PN Gadgil Jewellers, Zinka Logistics, Enviro Infra, One Mobikwik (based on potential m-cap calculation), Western Carriers, Manba Finance, and Baazar Style are among the 48 stocks that are anticipated to enter the small-cap universe. 

Source: Nuvama Alternative and Quantitative Research report