The AMFI (Association of Mutual Funds in India) rejig refers to a restructuring or realignment in the mutual fund industry in India. This could involve changes in the way mutual funds are categorized, modifications in guidelines for fund houses, or updates to improve investor awareness, transparency, and performance.
The rejig typically aims at improving the overall functioning of the mutual fund ecosystem, making it more investor-friendly, and aligning it with global best practices. For example, there may be changes in the categorization of funds, with clearer definitions to help investors make better-informed decisions.
According to Nuvama Alternative and Quantitative Research, the Association of Mutual Funds in India (AMFI) is anticipated to unveil its stock re-categorization in the first week of January 2026. This revised list will act as the benchmark for fund managers in making investment choices.
Projected Market Capitalization Cut-offs for Largecap and Midcap Stocks
Based on current market capitalization trends, the likely cut-off for large-cap stocks is projected at Rs. 1.05 lakh crore, up from Rs. 91,600 crore in June. Similarly, the cut-off for midcap stocks is expected to be Rs. 34,800 crore, compared to Rs. 30,700 crore in June. The categorization process will run until December 31, 2025, with the final classifications set to take effect on February 1, 2026.
Here are the likely market cap changes that the stocks could see, as per the Nuvama Report:
From Midcap To Large Cap
According to Nuvama Alternative, some midcap stocks, including Muthoot Finance, HDFC AMC, Canara Bank, Bosch, Cummins India, Polycab, Hero MotoCorp, Tata Capital, Tata Motors Commercial Vehicles, LG Electronics India, and ICICI Prudential Mutual Fund (once it lists), are expected to be reclassified as large-cap stocks starting next year.
From Largecap To Midcap
The Stocks such as Info Edge (India), Lupin, Bajaj Housing Finance, Havells India, Zydus Lifesciences, REC, Indus Towers, United Spirits, Mankind Pharma, JSPL, and Shree Cement may potentially be downgraded from their current large-cap status to the mid-cap category.
From Smallcap To Midcap
As per Nuvama Alternative, Endurance Technologies, and Poonawalla Fincorp are Smallcap stocks that might be upgraded to Midcap status. Additionally, newly listed companies like Groww, Lenskart, HDB Financial, Meesho, Anthem Biosciences, and PhysicsWallah are expected to be categorized as Midcap stocks as well.
From Midcap To Smallcap
On the other hand, stocks like Sona BLW, Gujarat Gas, LIC Housing Finance, AIA Engineering, Metro Brands, Ajanta Pharma, Honeywell Automation, Exide Industries, KPIT Tech, Central Bank of India, AWL Agri, NCL India, and Tata Elxsi are some Midcap stocks that could be downgraded to the Smallcap category.
According to the Nuvama Alternative note, most other recent listings, including Urban Company, JSW Cement, Epack Prefab, Anand Rathi Shares, Pine Labs, Pace Digitek, and Studds Accessories, are likely to be classified as Smallcap companies.
Market Capitalization Classification
Based on the current classification, companies are categorized according to their six-month average market capitalization as follows:
- Large-cap Companies: Companies ranked from 1st to 100th position.
- Mid-cap Companies: Companies ranked from 101st to 250th position.
- Small-cap Companies: Companies ranked from 251st position onwards.
Reclassification and Fund Manager Decisions
It is important to note that a reclassification of a company’s market cap does not automatically lead to inflows or outflows in that stock. As Nuvama Alternative’s note points out, “An active equity fund manager may choose to add, remove, or adjust the weightings of stocks in their portfolios based on their fundamental rationale.”
Written by Sridhar J
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