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Cyclicals and digital stocks to dominate upgrades in upcoming AMFI size reclassification; midcap upper threshold reaches all-time high of >US$5bn!

The upcoming AMFI reclassification of stocks based on size will take into account average market capitalisation for the period Jan-Jun’21 for reclassifying stocks into large, mid and small caps (large: top 100, mid: 101st-250th, and small: below 250th rank on market capitalisation). Based on the data available since Jan’21 till now and assuming prices will not deviate a lot from current levels during Jun’21, we observe the following trends:

* Cyclicals and digital stocks to dominate the upgrade list: Overall 20 stocks could potentially get upgrades (7 from mid to large, and 13 from small to mid). Of the above 20 stocks, 14 belong to cyclicals (industrials & lenders) while 5 belong to digital domain (platform, e-commerce or niche digital technology), and one defensive (healthcare).

* Upper limit for qualifying as a midcap stock crosses an all-time high of US$5bn last seen during May’18 and is up 5x from the Taper Tantrum lows of US$1bn.

* Upper threshold for small caps at US$1.6bn still below the level seen in Jan’18 level of US$1.8bn

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