AMFI may upgrade Zomato, Policy Bazaar, Nykaa, others to large-cap category: Report

A number of new-age companies like Zomato, PB Fintech (Policy Bazaar), One 97 Communications (Paytm) and FSN e-Commerce (Nykaa) are likely to get upgraded to the large-cap category in the upcoming bi-annual classification of shares by the Association of Mutual Funds in India (AMFI), a report said.

Some other stocks that are likely to move up the ladder from the mid- to the large-cap category include Mindtree, Tata Power, IRCTC, SRF, Godrej Properties and Mphasis, a research by ICICI Securities showed.

According to the brokerage firm, there is low probability that companies like Macrotech Developers, JSW Energy and Bharat Electronics will get upgraded to the higher category.

Interestingly major pharma companies like Lupin, Aurobindo Pharma and Biocon may move out of the large-cap space to the mid-cap category. Among the banks, Punjab National Bank, Bank of Baroda and YES Bank may move from the large-cap category to the mid-cap space.

Every six months, AMFI reclassifies stocks based on their market capitalisation into large-, mid- and small-cap categories. Based on the classification, mutual funds deploy funds as per scheme categorisation. The next reclassification is due in January. The January classification will be based on the stock price movements between July and December. With foreign portfolio investors looking to invest in stocks other than top companies, market depth of mid- and small-caps in terms of capitalisation has climbed to a new high.

Stocks that may be downgraded to small-cap from mid-cap include Apollo Tyres, Bank of Maharashtra, City Union Bank, RBL Bank, Blue Dart Express, Alembic Pharma, Glenmark Pharma, Exide Industries, Manappuram Finance, Zydus, Castrol India, Amara Raja Batteries and Indigo Paints.

On the other hand, some stocks may be upgraded from the small-cap to the mid-cap category in the upcoming recategorisation. These include Central Bank of India, Gujarat Fluorochemicals, Indian Energy Exchange, National Aluminium, Happiest Minds, Trident, Prestige Estates and Grindwell Norton.

SKF India has a low probability of being upgraded to the mid-cap segment, ICICI Securities said.