MF universe rejig: Large, midcap cutoffs likely to hit new highs in Jan

Amfi's January stock universe reclassification may lift the largecap cut-off to Rs 1.05 trillion and the midcap threshold to Rs 34,800 crore, driven by new listings and higher valuations

The market capitalisation (m-cap) cut-off to qualify for mutual funds’ largecap and midcap universe is likely to surge to a new high in the next re-classification. The fresh list of largecap, midcap and smallcap stocks is set to be released by the Association of Mutual Funds in India (Amfi) in the first week of January.

 

A report by Nuvama Alternative and Quantitative Research estimates the largecap cut-off to surge 15 per cent to ₹1.05 trillion compared to the current threshold of ₹91,572 crore.

 

The cut-off had exceeded ₹1 trillion once earlier, in January 2025.

 

Amfi revises the list of largecap, midcap and smallcap stocks at the start of January and July every year based on the previous six-month performance of stocks. The top 100 companies based on the average market-capitalisation (m-cap) in the past six months qualify as largecaps, the next 150 become midcaps and the rest smallcaps.

 

A similar rise is expected in the midcap cut-off with multiple new listings set to enter the basket. The report estimates the m-cap threshold to rise 13 per cent to ₹34,800 crore compared to the current cut-off of ₹30,756 crore.

 

The size of the smallest largecap and midcap stocks has gone up during most of the reviews in the post-Covid period owing to the market rally and growing number of listed players.

 

The largecap and midcap cut-offs have gone up in each of the reviews since January 2023 except July 2025. As a result, the largecap cut-off has more than tripled over the past five years. In the same period, the midcap threshold has climbed more than four-folds.

 

The higher cut-offs are also expected to lead to churn within the large- and mid-cap baskets.

 

Midcap stocks such as Muthoot Finance, HDFC AMC and Polycab India are seen as potential entrants into the large-cap universe, while some existing large-caps, including Lupin and Mankind Pharma, could slip into the mid-cap category.

The list of potential midcap entries is dominated by new listings such as Groww, Meesho and Lenskart.

 

While changes in categorisation do not automatically result in inflows or outflows, fund managers closely track the list as it influences portfolio construction within category-specific mandates, the report said.