8 midcaps turned largecaps! Geojit lists key market cap trends between July and Dec 2023

In a recent report on market capitalisation, brokerage house Geojit Financial Services highlighted that during the period from July to December 2023, the total average market capitalization reached a new high at ₹321.8 lakh crores, marking a significant increase of 17.7 percent compared to the preceding six months (January to June 2023).

The most notable growth was observed in Smallcaps, with a remarkable surge of 38.6 percent, while Midcaps experienced a rise of 26 percent, and Largecaps saw an increase of 11 percent, according to the report.

The brokerage also pointed out that in the market dynamics of the period, notable category shifts occurred, with 8 Midcaps transitioning to Largecaps and 12 Smallcaps advancing to the Midcap category.

The midcaps that turned large-caps in the second half of 2023 include Power Finance Corp, IRFC, Macrotech Developers, Polycab India, REC, Shriram Finance, Union Bank of India and Indian Overseas Bank.

Meanwhile, the small-caps that turned midcaps include Mazagon Dock, Suzlon Energy, Lloyds Metals, SJVN, Kalyan Jewellers, KEI Industries, CreditAccess Grameen, Exide Ind, Nippon Life, Ajanta Pharma, Narayana Hrudayalaya, and Genmark Pharma.

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Conversely, 8 Largecaps experienced declines, moving down to Midcaps, and 15 Midcaps regressed to Smallcaps, it added. Here's a look at these stocks.

Moreover, one demerged entity (Jio Financial Services) was also in the large-cap category, noted the brokerage.

IPO trends

The report also noted that 3 Initial Public Offerings (IPOs) secured positions in the Midcap category - Tata Tech, JSW Infra and IREDA.

The influx of new capital was evident, with an estimated ₹3.48 lakh crores being added to the market capitalization through more than 50 IPOs. Interestingly, 33% of this capital flowed into Midcaps, while 67% benefited Smallcaps.

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Furthermore, the stock market landscape saw changes with approximately 19 companies migrating from the Small and Medium Enterprises (SME) platform to the Main Board on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). This migration cumulatively contributed to a market cap of nearly ₹6940 crores, exclusively within the Smallcap category. These transformations reflect the dynamic nature of the market and the evolving status of companies within different market capitalization segments.

Other Market cap highlights

Among the large cap companies, those in the 51 to 100 cluster demonstrated the highest growth at 19.9 percent, followed by the 31 to 50 cluster, which recorded an 11.7 percent increase. The top 10 companies in this category showed a growth of 7.3 percent stated Geojit.

Meanwhile, in the Midcap-150 segment, there was balanced participation across the spectrum. The bottom 50 companies, ranging from 201 to 250 clusters, witnessed a substantial growth of 28.3 percent, while the top 50 Midcap set increased by 25 percent, it mentioned.

Within the Smallcap space, it informed that companies from the 251st position onwards exhibited overall growth, with the 1001 to 1500 cluster experiencing the highest surge at 50.8 percent. The 751 to 1000 cluster and the 501 to 750 cluster also demonstrated significant growth rates of 48.1 percent and 46.4 percent, respectively.

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However, the companies in the 11th to 30th group within the Midcap segment were the only ones to show a decline year-on-year (YoY), experiencing a decrease of -3.0 percent during the mentioned period, added Geojit.

Market Cap Thresholds

As per the brokerage, the market thresholds have undergone significant and expansive changes in recent years. For Largecaps, the threshold point has reached ₹67,000 crores, marking a substantial increase of 34.9 percent in the past 6 months, 37.1 percent year-on-year (YoY), and a remarkable 40.3 percent since 2020, reflecting a growth of 136.5 percent over 5 years.

In the Midcap segment, the entry point now stands at around ₹22,000 crores, showing an upward trajectory with an increase of 26.3 percent in the past 6 months, 30.8 percent YoY, and a significant 36.1 percent over 3 years, representing a growth of 156 percent in 5 years, it further stated.

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In the Smallcap category, the market capitalization of the 250th company or the 500th company in the listed universe has reached Rs. 7,315 crores, experiencing a substantial growth of 40 percent in the past 6 months, 39.2 percent YoY, and a noteworthy 63.4 percent over 3 years, demonstrating a remarkable 185.5 percent increase in 5 years, it informed.

Specifically, the 750th company's market cap stands at around ₹3,300 crores, and the 1000th company's market cap is at ₹1,700 crores, both witnessing a 50 percent increase in the past 6 months and experiencing significant multifold growth over the past 3 and 5 years. These evolving thresholds provide insights into the changing dynamics and increasing market capitalization in different segments, highlighted the brokerage.

Average Market cap Weights

In the period from July to December 2023, the market dynamics witnessed notable shifts in the distribution of market capitalization across different segments. The share of Largecaps in the total market cap experienced a decline, dropping to 64.4 percent from approximately 68.3 percent in the previous six months, according to Geojit.

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Meanwhile, it also observed that Midcaps saw an increase in market cap share, rising to 17.78 percent from 16.6 percent in the preceding six months. Smallcaps, representing all remaining companies, recorded a substantial growth in market cap weight, surging from 15.1 percent to 17.84 percent. This marks a noteworthy development, as Smallcaps' market cap weight surpassed that of Midcaps, a trend not seen in many years, said the brokerage.

Comparatively, the current Largecap weight is lower than the levels observed in 2018 and 2020, while Midcaps showed a slight improvement and Smallcaps exhibited a significantly higher weight than in 2020. Within the Largecap segment, the market cap share of the top 50 companies decreased, whereas companies in the 51 to 100 cluster saw growth, reaching 13.05 percent from 12.8 percent, opined the brokerage.

In the Midcap category, the market cap weight across Midcap clusters experienced an upward trend during the six-month period, reaching a five-year high. Similarly, in the Smallcap space, the market cap weight of all Smallcap clusters expanded, standing at a five-year high. These shifts in market cap distribution underscore the dynamic nature of the market and changing investor preferences across different market segments, it further added.

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Currently, the top 10 large-cap stocks with the highest market cap include RIL, TCS, HDFC Bank, ICICI Bank, HUL, Infosys, ITC, Bharti Airtel, and SBI.

Meanwhile, the top 10 midcap stocks as per mcap are Hero Moto, Samvardhana Motherson, CG Power, Zydus Life, JSW Energy, TI India, IDFC First Bank, Bosch, Max Health and Info Edge.

Finally, the top 10 smallcap stocks as per market capitalisation are Emami, Carborundum Universal, JB Chemicals, Kajaria Ceramics, Five-Star Business Finance, Bata India, Bharat Dynamics, ICICI Securities, Global Health, and Aditya Birla Fashion.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decision.