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AMFI, or the Association of Mutual Funds in India, serves as the industry body representing all SEBI-registered mutual fund houses in the country. 

SEBI mandates that mutual funds classify their equity schemes into large cap, mid cap, and small cap based on stock market capitalization. While SEBI provides general guidelines for these thresholds, AMFI is responsible for compiling the specific lists of stocks that fall into each category. 

The Indian stock market has experienced significant growth in overall market capitalization in recent years, leading to fluctuations in the categorization of stocks between large, mid, and small-cap categories. 

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AMFI updates these market cap thresholds every six months, in January and July. For instance, the new thresholds are effective from August 2024. 

The revised thresholds are set at Rs 84,300 crore for large-cap stocks (up from Rs 67,000 crore as of December 2023) and Rs 27,600 crore for mid-cap stocks (increased from Rs 22,000 crore previously). Stocks valued below Rs 27,600 crore fall into the small-cap category. 

This recategorization process is conducted biannually, with the current classifications remaining valid from August 2024 to January 2025. 

As of the latest AMFI report, large-cap stocks (top 100) now constitute 63.6% of the market, down slightly from 64.4% in December 2023, while mid-caps (ranked 101-250) have increased to 18.2% from 17.8%. Small caps (251 and beyond) now also account for 18.2%, up from 17.8% previously. 

The stocks that were previously classified as mid-cap are now considered large-cap, which include

StocksCurrent Market Price(₹)
Hero MotoCorp Ltd 5,534
Zydus Lifescience1,169
NHPC Ltd 104
Bharat Heavy Electricals Ltd326
Bosch Ltd 34,497
JSW Energy Ltd739
Samvardhana Motherson International202 

The stocks that transitioned from large-cap to mid-cap include. 

StocksCurrent Market Price(₹)
SRF Ltd 2,373
ICICI Prudential Life Insurance Company639 
Polycab India6,558 
Marico 641 
ICICI Lombard General Insurance Company1,843
Berger Paints India Ltd509
SBI Cards & Payment Services733

The stocks that moved from the small-cap category to the mid-cap category include. 

StocksCurrent Market Price(₹)
Housing & Urban Development Corporation Ltd338
Hitachi Energy India Ltd 13,751
Blue Star Ltd 1,655
BSE Ltd 2,387

On the contrary, stocks like Relaxo Footwear, Piramal Enterprises, Vedant Fashions, Zee Entertainment, Sun TV Network, and The Ramco Cement have been reclassified as small caps from their previous categorization as mid caps. 

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Additionally, around 32 new stocks have been introduced into the small-cap segment, including Aadhar Housing Finance, Juniper Hotels, Gopal Snacks, Awfis Space Solutions, Epack Durable, Mukka Proteins, and SRM Contractors. The reclassification helps mutual funds manage concentration risk by adjusting their portfolios in response to the substantial growth in market capitalization of many stocks. This adjustment increases stock visibility as they move across categories, potentially influencing fund manager’s decisions. 

As per Sebi norms, mutual funds must rebalance their portfolios within one month of any updates to the list. Active equity fund managers may choose to add, remove, increase, or reduce the weightings of stocks in their portfolios based on their fundamental rationale. 

Written by Omkar Chitnis 

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