The reclassification will take into account the average market capitalisation for the period January-June 2021
The upcoming reclassification of stocks on the basis of size by AMFI is likely to be dominated by the digital and cyclical stocks, according to a report by ICICI Securities.
The reclassification will take into account the average market capitalisation for the period January-June 2021 for reclassifying stocks into large, mid, and small caps.
ICICI Securities, based on the data available from January till now and assuming prices will not deviate a lot from current levels during June, noted that 20 stocks could potentially get upgrades, including seven stocks moving from mid to large-cap and 13 from small to mid.
Out of the 20 stocks, 14 belong to cyclical (industrials and lenders) while five belong to the digital domain (platform, e-commerce, or niche digital technology), and one defensive (healthcare).
It also said that the "upper limit for qualifying as a midcap stock crosses an all-time high of $5 billion last seen during May 2018 and is up 5 times from the Taper Tantrum lows of $1 billion".
The upper threshold for small caps at $1.6 billion is still below the level seen in January 2018 level of $1.8 billion.