This newly listed stock likely to enter midcap universe in AMFI review

“In the upcoming AMFI Semi-Annual Review, we expect 6 new large-cap stocks (midcap to large-cap upgrades), 13 new mid-cap stocks (6 small-cap to mid-cap upgrades, 6 large-cap to mid-cap downgrades, and 1 new listing), and 7 new small-caps (downgrades from midcap). This looks in line with historical trends. The cut-offs for the large-cap and mid-cap universe are ₹487 bn and ₹166 bn respectively based on average market capitalization since June 2022-end,” the note stated.

As per capital market regulator Securities and Exchange Board of India (SEBI), the listed stocks must be strictly categorized into baskets with a well-defined classification of largecap, midcap and smallcap stocks. This is to ensure uniformity in respect of the investment universe for equity mutual fund schemes.

Further, SEBI has also stipulated that Association of Mutual Funds of India (AMFI) shall prepare the list of stocks in this regard. Accordingly, AMFI in consultation with SEBI and stock exchanges, prepares the list of stocks with categorization based on the market capitalization provided by BSE, NSE and MSEI. The SEBI circular on Categorization and Rationalization of Mutual Fund Schemes defines large, mid, and smallcap stocks based on the 6-month average of full market cap.

Piramal Pharma listed its shares in October this year on the BSE and National Stock Exchange (NSE). In June 2020, the Carlyle Group Inc invested equity capital for a 20% stake in Piramal Pharma Limited (PPL). Accordingly, the pharmaceuticals business was vertically demerged from Piramal Enterprises Limited (PEL).

In October 2021, the board of directors of PEL approved the demerger of the pharmaceuticals business and simplification of the corporate structure to transform PEL from being a multi-sector conglomerate to two separate sector-focused listed entities in financial services and pharmaceuticals.

PPL includes Piramal Pharma Solutions (PPS), an integrated Contract Development and Manufacturing Organisation (CDMO); Piramal Critical Care (PCC), a Complex Hospital Generics business; and the India Consumer Healthcare business, selling Over-The-Counter (OTC) products.