Eight stocks, including Indian Railway Finance Corporation (IRFC) and Polycab India, are expected to move from the midcap to the largecap universe. This migration will occur during the semi-annual rebalancing next month. Additionally, 13 stocks will graduate from the smallcap universe to the midcap universe. However, changes may occur as stock prices fluctuate during this review period.


Analyst Brian Freitas of Periscope Analytics, who publishes on Smartkarma, explained that the migration between market cap segments is based on average market cap from July 1 to October 31.


Other stocks in a strong position to move to the largecap universe are Shriram Finance, Union Bank of India, Indian Overseas Bank, Rural Electrification, and Power Finance.


On the other hand, stocks that may be downgraded from largecaps to midcaps include UPL, Adani Wilmar, Indian Railway Catering and Tourism (IRCTC), Pi Industries, Bosch, Tube Investments, Hero Motocorp, and Samvardhana Motherson.


The reclassification of stocks is done by the Association of Mutual Funds in India (Amfi) every six months, based on their average market capitalisation (mcap) during the first and second six-month periods of a calendar year. The top 100 stocks by average mcap qualify as largecaps, the next 150 as midcaps, and the rest as smallcaps.


These changes can have an impact on portfolios with assets under management of nearly Rs 11 trillion. Among the stocks expected to move from the smallcap to the midcap segment are Maza­gon Dock Shipbuilders, Suzlon Energy, Lloyds Metals, SJVN (SJVN IN), Kalyan Jewellers, and CreditAccess Grameen.


Newly-listed firms Jio Financial and JSW Infra will directly enter the largecap and midcap segments, respectively. Currently, there are 99 stocks classified as largecap following the merger of HDFC Bank and HDFC.


Rajesh Exports, Aarti Industries, Pfizer, Vinati Organics (VO IN), and Crompton Greaves Consumer are expected to be downgraded from midcaps to smallcaps.

Polycab India and Lodha are also in contention to be included in the MSCI global index.

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