Is it time to rethink India’s market cap classifications?

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Subscribe to enjoy similar stories. The Association of Mutual Funds in India (Amfi) recently released the updated half-yearly data on market capitalization classifications for listed stocks. As defined by the Securities and Exchange Board of India (Sebi), largecaps are the top 100 companies by market capitalization, midcaps are ranked 101 to 250, and smallcaps are those ranked 251 and beyond.

As of December 2024, the minimum market capitalization to qualify as a largecap stock has risen to an impressive ₹1 trillion. This means that 100 Indian companies now boast a market cap exceeding ₹1 trillion (roughly $11.5 billion). For perspective, when Sebi first established this categorization in December 2017, the minimum threshold for a largecap was ₹29,304 crore—a 3.4x increase in just seven years! To qualify as a midcap today, the minimum market capitalization requirement is ₹33,221 crore, compared to ₹8,584 crore in December 2017—a 3.9x growth in seven years.

The trend is similar in the smallcap segment (stocks ranked 251-500) and in microcaps (stocks ranked beyond 500, although there is no formal definition for microcaps yet). This data highlights that while Sebi’s definitions for largecaps, midcaps, and smallcaps have remained unchanged since 2017-18, the dynamics of the Indian markets have shifted dramatically, buoyed by recent bull runs. With increasing stock market participation and a surge of capital chasing a limited number of stocks, the current boundaries—100 largecaps and 150 midcaps—are beginning to feel restrictive.