Adani Total Gas, NMDC, Apollo Hospitals shares may soon become largecaps; AMFI to take a call in July

Brokerage firm Edelweiss believes that Adani Total Gas along with Apollo Hospitals, Cholamandalam Investment and NMDC among others could be reclassified as largecaps in the semi-annual Amfi review in July. The final list of large, mid and smallcaps is expected to be released by Amfi between July 5 and July 7, which will be effective for the August 2021 to January 2022 period. Edelweiss also thinks that Honeywell Automation and Bank of Baroda will also be reclassified as largecap from midcap.

Sebi guidelines
As per the circular released by Sebi in October 2017, the domestic mutual fund schemes have to be strictly categorised into baskets with a well-defined classification of largecap, midcaps and smallcap stocks. With a rally of 1,480%, shares of Adani Total Gas have jumped to Rs 1,294 on May 25 from Rs 81.90 in March 2020. The market capitalisation of the company has spiked to over Rs 1.42 lakh crore from Rs 9,000 crore during the same period.

Apollo Hospitals, Cholamandalam Investment, NMDC, Honeywell Automation and Bank of Baroda have gained between 45%-300% since March 2020 lows. On the other hand, the benchmark BSE Sensex has advanced 90% during the same period.

Midcap additions
The report further highlighted that Abbott India, Hindustan Aeronautics, Alkem Laboratories, Hindustan Petroleum, PI Industries and Petronet LNG will be moved lower to the midcap category from the current largecap segment.

It further added that new debutants of Dalal Street including IRFC, Macrotech Developers and Indigo Paints will be moved to midcap segment from smallcap. Tata Elxi, Kajaria Ceramics, APL Apollo Tubes, Apollo Tyres, Bank of Maharashtra, Vaibhav Global, Affle India, Linde India and Alkyl Amines will also be shifted to midcap from smallcap.

Edelweiss said, “These are our initial predictions and we will release our final midcap names in the last week of June, 2021. Stocks are sorted by highest conviction.”

Definition of largecap, midcap and smallcap: Based on the full market cap

a) Largecap: 1st-100th companies (6-month average m-cap)

b. Midcap: 101st-250th companies (6-month average m-cap)

c. Smallcap: 251st onwards companies (6-month avg m-cap)