Late last month, the Securities and Exchange Board of India (Sebi) announced the reclassification of Real Estate Investment Trusts (Reits) as ‘equity-related instruments’ to boost mutual fund participation in these instruments.
If the mutual fund trade body brings in REITs into the equity share categories, KRT and Embassy could come under mid-caps, while Mindspace, Nexus and Brookfield could fall under small caps, said Nuvama Alternative’s head Abhilash Pagaria.
Mutual fund managers must keep an eye on the AMFI stock categorisation list, which serves as a rulebook for moving across large-cap, mid-cap and small-cap stocks. While re-categorisation need not lead to fresh inflows or outflows, an active equity fund manager must align their holdings within a month of the new list. The extent of the rebalancing is entirely the fund manager’s discretion.
The mutual fund industry body announces the reclassification of shares twice a year. AMFI will release the official list in the first week of January.
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