Zomato, Paytm, Nykaa, PolicyBazaar likely to get large cap tags says this Edelweiss report

Recently listed Zomato, FSN E-Commerce Ventures-backed Nykaa, One-97 Communications-backed Paytm and PB Fintech-backed PolicyBaazar are all set to enter into large cap space from mid-cap category, an Edelweiss Alternative Research report said in AMFI Semi Annual Review – MF Stock Categorization report on Wednesday. 

At least 13 new stocks are expected to make an entry into large cap category which include four new-age technology companies, this report further said.  

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From mid-cap IT to power to energy sector stocks such as MindTree, Mphasis, Tata Power, JSW Energy among others will also likely make an entry and trade alongside the heavyweights. 

“As per the AMFI official release on the Market cap categorization, the changes in the large, mid and small cap have been exactly in line with out our expectations,” the report pointed. The list will be effective from February to July 2022. 

Similarly, around 20 stocks are likely to be shifted from large cap to mid-cap category. In this, at least 7 stocks have been listed in 2021, which includes Rakesh Jhunjhunwala-backed Star Health, Aditya Birla Sun Life AMC, Devyani International among others, while others are from different sectors. 

The small-cap stocks with high growth potential that could soon make an entry into mid-cap category include Gujarat Fluoro, Happiest Minds, IEX, Nalco, Trident, CG Power among others. 

On the contrary, there are at least 20 stocks that would be demoted from mid-cap to small-cap category. These include Affle(India) Suven Pharma, Amara Raja, Exide, Indigo Paints, RBL Bank among other shares, the report said in its AMFI rejig expectations. 

According to the report, the market cap cut off for the Large cap is at Rs 47600 crore, whereas the mid cap cut off came at Rs 16200 crore. 

“Of the Total Market Cap, Large cap stocks (Top 100) attribute 68.8% vs 71.4% (July Review) | Mid cap stocks (101-250) attribute 16.9% vs 16.27% (July Review) | Small cap stocks (251 below) attribute 14.3% vs 12.29% (JulyReview)”, the report mentioned. 

Adding further, “The percentage share of small cap stocks has increased by almost 2 per cent as it is led by price outperformance in small cap stocks and also 32 of the recently listed IPOs have got featured in small cap category.” 

“The fresh listings which directly got added in midcap cap category are Star Health, Clean Science, Nuvoco Vistas, Aditya Birla AMC, GR Infraprojects, Aptus Value and Devyani International. While all the remaining fresh listing have debuted under Small cap category,” the research report also said. 

The AMFI Stock Categorization list is mainly referred by active equity mutual fund managers.