14 New Entries in Midcap Category Elevated from Smallcap Category

14 Small Cap Stocks Entered into New Mid Cap List

Introduction

In this article, we are going to see 14 new entries in Midcap Category elevated from Smallcap category as per SEBIs new categorization of stocks published on June 30, 2019.

• As per the categorization done by SEBI,
  1. Top 100 companies are Large Cap companies
  2. 101 to 250 companies are the Mid Cap Companies
  3. Above 250 companies are the Small Cap Companies
• This ranking is according to the Market Capitalisation of these companies.
• Here, Market Capitalisation = No. of Shares Issued * Current Share Price
• Thus, total market capitalisation of any company indicates its current total market value.

14 New Entries in Midcap Category elevated from Smallcap category

• As per the new categorisation of companies published by SEBI on June 30, 2019. There are total14 new entries in Midcap Category elevated from Small Cap category. That is they are upgraded from small cap list.
• Out of the total 14 companies,
  • 5 : PSU Banks
  • 2 : NBFC and Housing Finance Companies(HFC)
  • 2 : Real Estate and Allied Business Companies
  • 5 : Other Sectors

PSU Banks

• In last 6 months, PSU banks have seen a big rally in their stock prices because of Interim Budget(Feb19) and Budget 2019-20(July19).
• Government has infused a considerable amount of capital into PSU banks. This has helped these small cap PSU banks for their NPA provisioning, credit growth activities etc.
• According to the recent Budget 2019(July19), a fresh capital infusion of Rs.70,000 Crore to PSU banks is going to be executed by the government. Thus, these PSU banks are planning to make provisions and grow their credits from the capital to be provided by government.
• UCO Bank, Corporation Bank, Indian Overseas Bank, Allahabad Bank and Oriental Bank of Commerce, these 5 PSU banks were from small cap category as per Dec-18 categaorisation. However, these 5 PSU banks are upgraded to new Mid Cap companies list published by SEBI on June 30, 2019.
• Since last 2 years, these PSU banks seen NPAs pressure and thus, they were to keep aside a part of their operating profits for the sake of provisioning of NPAs. That is the reason, these banks had to book losses or negative profits in their financial statements. As a result, their market capitalisation was not growing significantly.
• But after Interim and Final Budget 2019, the PSU banks had to make comparatively less provisioning of NPAs from their operating profits due to capital infusion by the government. So, in accordance with the fresh capital inflow, these PSU banks have seen a sentimental positivity for their stocks in the market. It can be a key reason for the upgradation of these 5 PSU banks to new Mid cap companies list from small cap category.

NBFC and Housing Finance Companies

1. In the financial services vertical, there are 2 more companies : First is Manappuram Finance Ltd (NBFC) and the second is Aavas Financiers Ltd (Housing Finance Company).
2. Manappuram Finance Ltd
   • It is a NBFC which provides a wide range of fund based and fee based services including gold loans, vehicle finance, insurance, money exchange facilities etc.
   • There are 7 companies under its fold, having more than 700 branches spread over 14 states and a total business over Rs.20 billion and a customer base of over 1 million.
   • There is a consistent growth in the revenue as well as net profits of the company. Thus the consistency in making profits and paying dividends from the first full year of its operations is making it a fundamentally sound NBFC stock. According to market cap, its ranking is come down from 273 to 227 in 6-months (Dec-18 to June-19).
3. Aavas Financiers Ltd
   • It is a affordable housing finance company (HFC). Aavas Financiers majorly focuses on small retail loans and provides housing loan to customers belonging to low and middle income segment in semi-urban and rural areas.
   • There is a great financial track record of the company with a significant and consistent growth in revenue and net profits since last 3 years. The ranking is decreased from 310 by Dec-18 to 248 in June-19.

Real Estate and Allied Business Companies

1. Prestige Estate Projects Ltd
   • It is engaged in the business of real estate development. It has a diversified real estate portfolio focusing on residential as well as commercial projects.
   • Prestige Estate is having a good consistency in the revenue and net profits growth over last 6 years. Market cap has incraesed from Rs.8,288 Cr(Dec-18) to Rs.9,025 Cr(June-19), with the ranking upgradation from 255 to 246.
2. Kajaria Ceramics
   • It is the largest manufacturers of Ceramic and vitrified wall and floor tiles in the country and 9th largest in the world.
   • There is a significant growth in the sales and net profit numbers every year, making the most promosing stock due to the added advantage of current fast pacing growth of infrastructure development sector.
   • The rank is improved from 290 to 242 in June-19.

Other Sectors

Capital Goods

• V-Guard Industries manufactures a range of products such as voltage stabilizers, pumps, electric water heaters, solar water heaters, cables, UPS, ceiling fans, etc.
• It is also having a consistent track record of revenue as well as net profit growth.
• As per Dec-18 categorization of stocks by SEBI, V-Guard was the biggest small cap company ranked ar 251 in Dec-18 list. From 251 rank has come down to 239. Current market cap is around Rs.10,500 Cr.

Consumer Durables

• Symphony is in the field of residential, commercial and industrial air cooling both in the domestic and international markets.
• It has a wide product portfolio in Evaporative air coolers, air conditioners, water heaters etc.
• Ranking has upgraded from 274 to 249 in June-19 list.

Speciality Chemicals

• Vinati Organics is engaged in manufacturing of speciality organic chemicals – intermediates and monomers. It executes critical orders as per the customer demands.
• It has a very good financial results over last 10 years. Compounded annual profit growth is around 30% with a consistent growth in its fundamental parameters.
• Ranking upgradation is from 294 to 247.

Healthcare

• Fortis Healthcare is engaged in business of hospital activities. It manages and operates a network of multi-specialty hospitals and diagnostic centers.
• The improvemet in the ranking can be seen from 280(Dec-18) to 223 (June-19).

Oil & Gas

• Mahanagar Gas Ltd (MNGL) is in the business of City Gas Distribution presently supplying Natural Gas in the city of Mumbai including its adjoining areas and the Raigad district, in the State of Maharashtra, India.
• Net profits are growing consistently since last 10 years. Ranking has come down from 252 to 244 due to considerable increase in the market cap since last 6 months.