Nykaa loses largecap status after 42% drop from 52-week high

Following a 42% drop in its share price from its 52-week high, FSN E-Commerce, which runs fashion and beauty e-tailer Nykaa, has been downgraded from largecap to midcap category by the Association of Mutual Funds in India (AMFI).

The mutual fund body categorizes stocks on the basis of their market capitalisation once every six months. The top 100 stocks in terms of their market value are tagged as largecap, those ranked between 101-250 are treated as midcaps while others in the top 500 list (251-500) are treated as smallcaps.

AMFI Downgrades
Not just Nykaa, JSW Energy, Tata Elxsi, Indus Towers, Macrotech Developers, and Info Edge have also been downgraded to midcap.


Stocks that have been downgraded from midcap to smallcap are Piramal Pharma, Tata Tele, Fine Organic, Clean Science, Dr. Lal Pathlabs, and Blue Dart Express.

AMFI Upgrades
On the other hand, RVNL, Bank of Maharashtra, Punjab & Sind Bank, Jindal Stainless, Bharat Dynamics, and New India Assurance have earned upgrades to midcap category from smallcap.

All fresh listings have debuted under smallcap category, except for Mankind Pharma which has made its entry in largecap.

The list of counters that have migrated to largecap from midcap includes JSPL, Punjab National Bank, IDBI Bank, Canara Bank, TVS Motor, and Tube Investments.

Do these changes matter?
Referred to by active equity mutual fund managers, AMFI stock categorisation may not lead to fresh inflows or outflows.

"The recategorization helps but not necessarily immediately in terms of flows. As the stocks move up from the lower categorization to higher (eg- smallcap to midcap and midcap to largecap), it leads to more visibility for stocks and thus the fund managers can look to further analyse the names and add as per their rational and scheme mandate," said Nuvama's Abhilash Pagaria.

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