Digital, cyclical stocks to dominate in next AMFI stock reclassification
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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 upcoming reclassification of stocks based on size will take into account average market capitalisation for the period January-June 2021 for reclassifying stocks into large, mid and small caps.
Based on the data available since January till now and assuming prices will not deviate a lot from current levels during June, ICICI Securities noted that overall 20 stocks could potentially get upgrades, including seven stocks moving from mid to large cap and 13 from small to mid.
Of the above 20 stocks, 14 belong to cyclicals (industrials and lenders) while five belong to 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 5x from the Taper Tantrum lows of $1 billion".
The upper threshold for small caps at $1.6 billion still below the level seen in January 2018 level of $1.8 billion.
