AMFI reshuffle expected to see a marginal rise in large-cap cut-off, drop in mid-cap bar
According to Nuvama Alternative Research, the market-cap threshold for large-cap stocks in AMFI’s semi-annual reclassification is expected to edge up slightly to ₹1.07 lakh crore from ₹1.05 lakh crore in December.
In contrast, the minimum market capitalisation required for a stock to be treated as mid-cap is projected to decline to ₹32,800 crore, compared with ₹34,800 crore in the previous December review.
This divergence between large-caps and the mid- and small-cap segments is attributed to uneven market behaviour, where investors have gravitated towards higher-quality stocks after the recent correction in valuations.
Vedanta, led by Anil Agarwal, has been split into four separately listed entities. Based on current market values, Vedanta Aluminium (₹1,84,222 crore) will fall into the large-cap bucket, while Vedanta Power (₹16,091 crore), Vedanta Oil & Gas (₹13,765 crore) and Vedanta Iron & Steel (₹8,646 crore) will all be classified as small-caps.
Among the likely additions to the large-cap list are BSE, Vodafone Idea, Hitachi Energy India, Jindal Steel, Indian Bank, Indus Towers, Billionbrains Garage Ventures, Bharat Heavy Electricals and Vedanta Aluminium.
Names expected to move down from large-cap to mid-cap status include Lodha Developers, Indian Hotels Co, Mazagon Dock Shipbuilders, Max Healthcare Institute, LG Electronics India, Dr Reddy’s Laboratories, Siemens Energy India, Bosch and Hero Motocorp.
On the mid-cap side, probable new entrants are Hindustan Copper, NLC India, AIA Engineering, Ajanta Pharma, Aster DM Healthcare and Sona BLW Precision Forgings. Likely downgrades from mid-cap to small-cap are Kaynes Technology India, SJVN, Cholamandalam Financial Holdings, Physicswallah, Global Health and Crisil.
Fresh additions to the small-cap universe are expected to include Bharat Coking Coal, Fractal Analytics, CMPDI, Clean Max Enviro, Shadowfax Tech, Amagi Media Labs, Sedemac Mechatronics, Powerica, Kwality Walls, Omnitech Engineering, Aye Finance, Sai Parenteral, PNGS Reva Diamond Jewellery, CMR Green Tech and Hexagon Nutrition.
Sriram BKR, Senior Investment Strategist at Geojit Financial Services, noted that while the cut-off market caps for large- and mid-cap segments have moved in different directions, a clearer picture of segment performance would come from examining changes in their average and median market capitalisations over this period.
He also pointed out that the mid-cap index hit a new all-time high in June.
Citing market-cap index ratios versus the broader Nifty 500 as of May, Sriram said large-caps are trading at a 5.4 per cent discount to their five-year average, whereas mid-caps are at a 16 per cent premium and small-caps at an 8 per cent premium.
Nikunj Saraf, CEO of Choice Wealth, observed that the slight increase in the large-cap cut-off underlines the ability of the top 100 companies to withstand foreign portfolio investor selling and still preserve their market capitalisation.
He added that rising inflation—reflected in the RBI’s FY27 projection of 5.1 per cent with a peak of 5.9 per cent in Q3—is squeezing margins, especially for mid- and small-cap firms that have weaker pricing power and are more vulnerable to higher input costs.
Saraf cautioned that broad, non-selective exposure to mid- and small-cap segments without strong earnings visibility is not being rewarded in the current macroeconomic backdrop.
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