Ahead of the reclassification of stocks as per the Association of Mutual Funds in India in the first week of July, stocks eligible for upgradation rose as much as 80% in the first quarter of the financial year 2023–24.
A total of nine stocks may move from 'midcap' to 'largecap', while 10 may be reclassified as 'midcap' from 'smallcap', on the basis of changes in their market cap since the beginning of the calendar year, according to BQ Research.
The daily average market caps of the companies rose enough to qualify for reclassification to fit the AMFI criteria, according to Bloomberg data.
The association of all asset management companies of SEBI-registered mutual funds classifies each security as a "large cap, "mid cap, or "small cap" based on their daily average market cap over a six-month period.
The 100 companies with the highest average daily market cap over the past six months are classified as "large caps". The next 150 get classified as 'midcap', with the remaining being 'smallcap'.
TVS Motors saw a 24.36% increase in price since the beginning of the first quarter of the current fiscal, while IDBI Bank witnessed a 20.11% rise.
The rise was more than the benchmark performance in Nifty 50, which grew 7.58%, Nifty Next 50, which grew 14.23%, and Nifty Midcap 100, which grew 15.23% during the same period.
On the other end, Jindal Steel & Power fell 3.73% since April 1, the only one among the stocks eligible for reclassification.
Rail Vikas Nigam rose 80.47% during the period, the most out of any scrip among the stocks eligible for reclassification, while Fertilizers and Chemicals Travancore's growth was 56.13%.
Carborundum Universal saw a 137% spike in its daily average market cap for the six-month period beginning Jan. 1, against the preceding six-month period ending with the calendar year, while that of Ramco Cements grew 108%.
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