IT major Mphasis and One 97 Communication (Paytm) are some of the stocks that may be downgraded from large- to mid-cap in the bi-annual classification of stocks as per their market capitalisation by the Association of Mutual Funds in India (AMFI).

Other companies that may be downgraded to mid-cap include Piramal Enterprises, Gland Pharma, Bandhan Bank and Muthoot Finance, according to the ICICI Securities study. Mutual funds have to realign their investments in large-, mid- and small-cap schemes as per the list to be finalised early next month.

Similarly, National Aluminium, Godrej Industries, India Energy Exchange and New India Assurance are some of the companies that will be downgraded from mid- to small-cap due to sharp fall in their share price.

The upcoming semi-annual list of stocks classification by AMFI will take into account data from July to December, which was largely a period of rising equity valuations with Nifty gaining 17 per cent.

Wide-spread rally

Stocks that are likely to see upgrades from mid- to large-cap and small- to mid-cap are largely from cyclical sectors such as industrials, banks and discretionary consumption, said the ISec report on Thursday.

Though bank stocks, especially that of PSUs, have significantly outperformed over the first half of this year, they were not able to jump categories in large numbers as the rally was wide spread.

Upper threshold limit of mid- and small-caps in US dollar increased further in the second half of this year due to rupee depreciation against the dollar. Mid- and small-cap upper threshold for market capitalisation increased to $6.3 billion and $2.3 billion respectively. Incidentally, Nifty Mid-cap 150 and Nifty Small-cap 250 increased to 21 per cent and 20 per cent from June-end.

Consumer-focused Varun Beverages, Page Industries and Trent are likely to be upgraded from mid-cap to large-cap due to sharp rally in their stock prices. Among other companies that will see an upgrade include ABB, Tata Elxsi, Bosch and Tube Investments.

Companies that will be upgraded from small- to mid-cap include Timken India, Metro Brands, Blue Dart, Fine Organic, ZF Commercial, KPIT Tech, Apollo Tyres and UCO Bank.   

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