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Large cap and midcap thresholds increase by approximately 25% during the stock market rally
The threshold increased to Rs 67,000 crore and Rs 22,000 crore following the completion of the last rebalancing in December 2023.
The threshold for a stock to be considered large and midcap has increased to Rs 84,325 crore and Rs 27,564 crore after the recent rebalancing by Amfi, an industry association. After the last rebalancing in December 2023, the threshold increased by approximately 25 percent from Rs 67,000 crore and Rs 22,000 crore, respectively.
In the first half of 2024 (H1 CY24), Nifty 50 and BSE Sensex increased by 10.5% and 9.4% respectively. In the meantime, the BSE Midcap and Smallcap indices performed better, rising by 25 % and 22 % respectively.
As per regulations set by Sebi, the largest 100 companies based on their total market capitalization are classified as large-cap stocks. Midcap stocks range from 101 to 250 while smallcap stocks start from 251 and beyond.
The mcap threshold for large and midcaps was Rs 29,000 crore and Rs 8,500 crore, respectively when the framework was initially launched in 2017.
Following their strong performance, seven stocks have transitioned from the midcap category to large-cap during the most recent rebalancing. Some of the companies listed are Hero Motocorp, Zydus Lifesciences, JSW Energy NHPC, Bhel, Samvardhana Motherson International, and Bosch.
Polycab India, ICICI Prudential Life Insurance Company, ICICI Lombard General Insurance Company, SRF, Marico, SBI Cards and Payment Services, and Berger Paints were the stocks that paved the way for them. The significant fluctuation in stock prices in recent months, sparked by election-related uncertainty, has resulted in increased turnover compared to normal levels. Additionally, it became difficult for analysts to forecast which stocks would experience an upgrade or downgrade.
Approximately 19 additional stocks have been added to the midcap index. This list comprises recently added companies Bharti Hexacom and Go Digit General Insurance. Hudco, Bharat Dynamics, IRB Infra, and MRPL are part of the 17 stocks that have recently been moved up from smallcap to midcap status.
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