Hyundai To NTPC Green — Biggest IPOs Of 2024 Expected To Join Large-Cap Basket

Companies behind India's three biggest IPOs this year — Hyundai Motor India Ltd., NTPC Green Energy Ltd. and Swiggy Ltd. — are likely to be categorised as large-cap stocks by the Association of Mutual Funds in India. According to Nuvama Institutional Equities, several AMFI-classified mid-cap stocks like CG Power and Industrial Solutions Ltd., Rail Vikas Nigam Ltd., and Indus Towers Ltd. are also expected to join the large-cap club.

"Phenomenally, fuelled by the current market momentum, we now anticipate the AMFI large-cap cut-off to surge to Rs 1 lakh crore, while the mid-cap threshold is expected to soar to Rs 32,800 crore," the brokerage said.

Currently, the AMFI cut-off for market capitalisation of large-cap stocks is set at Rs 84,000 crore, while that of mid-cap stocks is set at Rs 27,500 crore.

The AMFI stock categorisation list is mainly referred to by active equity mutual fund managers. As the stocks move up from lower categorisation to a higher one, it increases their visibility. Fund managers typically further analyse such stocks and add them as per their rationale while complying with the scheme mandate.

Currently, AMFI's categorisation of large-cap stocks includes 100 of the country's biggest companies, including Reliance Industries Ltd., Tata Consultancy Services Ltd., HDFC Bank Ltd., ICICI Bank Ltd., Bharti Airtel Ltd., State Bank of India, and Infosys Ltd.

The mid-cap subcategory has 250 stocks in it, including the likes of Indian Hotels Co., Vodafone Idea Ltd., Indian Railway Catering & Tourism Corporation Ltd., Max Healthcare Institute Ltd., Solar Industries India Ltd., and Tube Investments of India Ltd.

"With the ongoing bull run, these thresholds continue to break records, setting new highs with each semi-annual reviews," Nuvama added.

The change in categorisation will not lead to incremental inflows or outflows. The re-categorisation is periodically undertaken as per a directive by the Securities and Exchange Board of India, which says that listed stocks must be put into baskets with a well-defined classification of large-cap, mid-cap and small-cap stocks. Accordingly, AMFI in consultation with SEBI and the stock exchanges, prepares the list of stocks with categorisation based on market capitalisation.