MFs' mcap baskets set for reshuffle; Largecap, midcap cut offs to decline

The changes, especially in the largecap space, is expected to be the highest in recent years, given the volatility in 2025 so far

The large, mid and smallcap investment space of mutual funds is set for a reshuffle, with over 20 stocks expected to move in and out of each of the market capitalisation (mcap) baskets.

 

Association of Mutual Funds in India (Amfi) revises the largecap, midcap and smallcap stock list in January and July every year.

 

The half-yearly reclassification is crucial for mcap-based schemes like largecap, midcap and smallcap to remain true-to-the-label by aligning their portfolios according to the category mandate.

 

According to an analysis of mcap data of the first half of 2025 (as of June 16), as many as 11 midcap stocks, including the likes of Indian Hotels, Max Healthcare, Mazagon Dock and Shree Cement, are likely to earn the 'largecap' tag during the next reclassification. 

 

The midcap universe may see 12 new entrants, including KPR Mill, Cholamandalam Financial, Godfrey Phillips, and Multi Commodity Exchange.

 

In the reclassification, 100 stocks with the highest average mcap in the previous six months are tagged largecaps. The next 150 stocks are midcaps. The remaining are classified as smallcaps.

 

The changes, especially in the largecap space, are expected to be the highest in recent years, given the volatility in 2025 so far.

 

Correction in the initial months of the year also means a reversal in the post-Covid trend of midcap cut off. 

 

The mcap cut off to qualify as a midcap company is expected to come down for the first time in nine such exercises in the last four and a half years.

 

The cut off this time is expected to be around ₹29,000 crore compared to ₹33,221 crore in January 2025.

 

Similarly, in the largecap space, the cut off is likely to come down from ₹1 trillion to ₹90,000 crore.

 

In the post-Covid period, the cut offs had grown multi-fold due to a rally in stock prices.

 

The growing cut offs had even led to calls for expansion of the largecap and midcap universes.

 

Amfi will release the revised list in the first week of July.

 

The new entries in the largecap space are likely to come in place of Rail Vikas Nigam Ltd (RVNL), Hero MotoCorp, Indian Overseas Bank, Cummins India, Swiggy, Polycab India, Bosch, ICICI Prudential Life Insurance, Dabur India, JSW Energy and NTPC Green Energy. 

From the current midcap basket, stocks like Punjab & Sind Bank, Ola Electric Mobility, Aditya Birla Fashion and Retail, Indraprastha Gas and The New India Assurance Co are likely to get downgraded to the smallcap category. 

In line for upgrades 

Midcap to largecap

 

• Indian Hotels Co
• Max Healthcare Institute
• Mazagon Dock Shipbuilders
• Solar Industries India
• Shree Cement
• Mankind Pharma
• Apollo Hospitals Enterprise
• Union Bank of India
• Lupin
• Jindal Steel & Power
• Dixon Technologies India

  Smallcap to midcap

 

• KPR Mill
• Cholamandalam Financial Holdings
• Godfrey Phillips India
• Global Health
• Multi Commodity Exchange 
• of India
• ITI Limited
• Radico Khaitan
• Laurus Labs
• Authum Investment & Infrastructure
• Narayana Hrudayalaya
• New listings in midcap
• ITC Hotels
• Hexaware Technologies

  Expected changes based on average mcap from Jan 1, 2025 to June 16, 2025   Final changes to be announced on the basis of average mcap between Jan 1 to June 30

Source: BS Research