Amfi stock classification: BHEL, 6 more stocks to become largecaps in H2CY2024. Check m-cap cut-off

The average market capitalisation cut-off for a stock to make it to the largecap category in the upcoming Amfi semi-annual categorisation is expected to be Rs 84,000 crore compared to an average of Rs 67,000 crore in the six months ending December 2023, Nuvama said in a note.

Meanwhile, the midcap threshold is likely to hover around Rs 27,500 crore this time compared to Rs 22,000 crore at the end of December 2023.

Based on the average market capitalisation for the period spanning between January 1 and June 30, 2024, seven stocks are expected to make a cut into the largecap category. Among them are two-wheeler major Hero MotoCorp, state-run Bharat Heavy Electricals (BHEL) and NHPC. The other stocks which are expected to enter the club are Zydus Lifesciences, JSW Energy, Bosch and Cummins India.

Bosch is on a borderline, Nuvama report said.

The definitions of largecap, midcap and smallcap stocks are based on the average of full mcap reviewed on a half yearly basis by AMFI. The first 100 companies are categorised as lagecaps, while midcaps are companies occupying spots between 101 and 250. The remaining are clubbed in the smallcap category.

The semi-annual categorisation will come into effect from August 1, Nuvama said.

The current market capitalisation of all these seven stocks is above Rs 1 lakh crore and they have rallied between 242% and 79% over the past 12 months. State-run BHEL and NHPC have been multibaggers with returns of 242% and 120%, respectively. JSW Energy and Cummins India have yielded 158% and 112%, respectively over a one-year period.

For now, Amfi categorises them as midcap stocks.

Meanwhile an equal number of stocks are likely to be demoted from largecap category to midcap viz. Berger Paints, SBI Cards and Payment Services, SRF, ICICI Lombard, Polycab India, ICICI Prudential Life Insurance. The stocks which are on the borderline are ICICI Lombard, Polycab India and ICICI Pru Life.

Polycab India is on a borderline.

The likely climbdown in these stocks are on the relative underperformance in these stocks. Berger Paints (-10%), SBI Card (-14%) and SRF (8%) have seen their prices erode over the last 12 months. Though Polycab India (91%) and ICICI Lombard (35%) have managed to outperform Nifty (21%), they may not be enough for these stocks to hold on to their status if Nuvama's estimates are to come true.

Moreover 18 stocks are expected to move to the midcap category from the current smallcap category with April listed Bharti Hexacom to also make a likely cut. Among smallcaps which may graduate to midcap include HUDCO, IRB Infra Developers, MRPL, Global Health (Medanta), BSE, Bharat Dynamics, Hitachi Energy, NLC India, Tata Investment Corporation, Hindustan Copper, National Aluminium Company, ITI, Motilal Oswal Financial Services (MOFSL), Apar Industries, Cochin Shipyard, Godrej Industries and Blue Star.

On the contrary, 18 midcap stocks could find themselves slipping into the smallcap space. These are Zee Entertainment Enterprises, IIFL Finance, Devyani International, Piramal Enterprises, The Ramco Cement, Relaxo Footwear, SKF India, CreditAccess Grameen, Kansai Nerolac, Hatsun Agro, Sundaram Fasteners, Grindwell Norton, Timken India, Vedant Fashions, Bayer Crop Sciences, Sun TV Network Narayana Hrudayalaya and Glenmark Pharma.

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