AMFI Rejigs Market Cap Ranks: Funds Must Realign Portfolios
Overview
AMFI has updated its market capitalization classification based on six months data ending December 2025. This regulatory change, effective February 2026, mandates mutual funds to rebalance their portfolios. The classification defines large-cap (top 100), mid-cap (101-250), and small-cap (251+) companies, impacting investment strategies and stock flows.
AMFI Unveils New Market Cap Ranks
The Association of Mutual Funds in India (AMFI) has published its updated classification of listed companies based on average market capitalization over the six months concluding December 2025. This regulatory adjustment is set to guide mutual fund portfolio construction for the upcoming period.
Mandatory Portfolio Realignments for Funds
Mutual fund houses must now align their portfolios according to this new framework, which will be effective from February 2026 through July 2026. The classification delineates large-cap stocks as the top 100 companies by market value.
Mid-cap companies are defined as those ranked between 101 and 250. Stocks falling outside this range, from 251 onwards, will be categorized as small-caps. This periodic review ensures that fund mandates remain aligned with market realities and regulatory standards.
Impact on Stock Flows and Investor Strategies
The classification rejig is expected to induce substantial trading activity as funds rebalance their holdings. Stocks moving between categories may experience heightened volatility due to mandatory buying or selling. Investors should pay close attention to these reclassifications, as they can signal shifts in fund flows and potentially influence short-term stock performance.
