AMFI reclassification: BSE, Vi, Indus Towers, ICICI Pru seen entering large-cap club; Lodha, Max Healthcare, Mazagon Dock face exit
ADVERTISEMENT
The Association of Mutual Funds in India's (AMFI) upcoming semi-annual stock reclassification is expected to trigger broad portfolio rebalancing across the mutual fund industry, with nine companies likely to be upgraded to the large-cap category, according to a latest report by Equirus Securities.
As per the Equirus’ analysis, nine stocks are likely to be reclassified from the mid-cap to the large-cap category, while eight stocks are expected to move from small-cap to mid-cap.
The brokerage's analysis, based on average market capitalisation data between January 1 and June 25, ahead of the June 30 cut-off date, suggests that several stocks could witness increased institutional interest as funds realign portfolios to comply with category mandates.
The revised AMFI classification list is expected to be released in early July, with fund houses required to complete portfolio adjustments by August 1.
Nine stocks likely to join large-cap category
Among the likely beneficiaries, BSE Ltd. has emerged as the most prominent candidate for inclusion in the large-cap universe. The brokerage said the stock could also find a place in the Nifty 100 index and has emerged as a contender for inclusion in the Nifty 50.
"BSE is expected to move to the large-cap category and is likely to be included in the Nifty 100, while also emerging as a contender for the Nifty 50," Equirus said.
Apart from BSE, the brokerage expects Vodafone Idea, Hitachi Energy India, Jindal Steel & Power, IndusInd Bank, Indus Towers, Groww Asset Management, Bharat Heavy Electricals (BHEL) and VAML, the demerged entity, to move from the mid-cap to the large-cap category.
The report also identified eight companies that are likely to be upgraded from the small-cap to the mid-cap segment. These include Hindustan Construction Company, RBL Bank, NLC India, Action Construction Equipment, Aether Industries, Gujarat Gas, Aster DM Healthcare and Sona BLW Precision Forgings.
The expected upgrades could lead to incremental flows from mutual funds, as several schemes maintain category-specific mandates that require minimum allocations to stocks belonging to particular market-cap segments, the agency said in its report.
Lodha Developers, Max Healthcare, Mazagon Dock among likely large-cap exits
On the other hand, a number of companies currently classified as large caps are likely to slip into the mid-cap category. Lodha Developers, Max Healthcare Institute, Indian Hotels Company and Mazagon Dock Shipbuilders are among the key names that could face downgrades, the report noted.
The broader list of likely large-cap exits also includes GAIL (India), Bosch, Dr. Reddy's Laboratories, Energy Infrastructure Trust, LG Electronics India, Shree Cement and other companies whose market-cap rankings have weakened during the review period.
Equirus noted that these changes may also influence future index rebalancing exercises, particularly in the Nifty 100 and Nifty Next 50.
Market-cap gains boost upgrade prospects
Among the upward movers, ICICI Prudential Asset Management Company topped the list with an average market capitalisation of ₹1.52 lakh crore since June 2025, compared with a six-month average of ₹1.30 lakh crore.
BSE recorded one of the sharpest improvements, with its average market capitalisation rising to ₹1.33 lakh crore from ₹1.01 lakh crore, aided by a 52.7 per cent rally in the stock this year. Its tentative market-cap ranking improved to 75 from 105.
Hitachi Energy India also emerged as a strong performer, with its shares surging over 100 per cent this year. The company's average market capitalisation increased to ₹1.2 lakh crore from ₹86,854 crore, improving its ranking to 84 from 131.
Vodafone Idea witnessed a substantial improvement as well, supported by a 38.7 per cent gain in its share price this year. Its average market capitalisation rose to ₹1.22 lakh crore from ₹93,993 crore, lifting its ranking to 83 from 116.
On the flip side, Lodha Developers recorded the sharpest deterioration among the companies tracked by Equirus. The company's average market capitalisation declined to ₹92,527 crore from ₹1.2 lakh crore, while its ranking slipped to 120 from 79 following a 13.5 per cent decline in the stock this year.
According to Equirus, these shifts in market-cap rankings are likely to play an important role in the next round of AMFI reclassifications and could subsequently influence benchmark index changes, potentially affecting institutional flows into several stocks.
(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)