Shares of small-cap companies were in demand on Thursday with the BSE SmallCap index hitting a new high of 55,773.12. This came after the index gained 1 per cent in today's intraday trade on the back of a sharp rally in logistics, auto ancillary, chemicals, pharmaceuticals, textiles, and fertiliser stocks.
The index surpassed its previous high of 55,685.07, touched on July 31, 2024.
At 12:28 PM, the BSE SmallCap index, the top gainer among broader indices, was up 0.63 per cent as compared to a 0.55-per cent rise in the BSE MidCap index and 0.27-per cent gain in the BSE Sensex index. Thus far in the calendar year 2024, the SmallCap index has rallied 30 per cent. In comparison, the MidCap index has surged 31 per cent, while Sensex has gained 12 per cent.
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Transport Corporation of India (TCI), Varroc Engineering, TVS Electronics, and Precision Camshafts zoomed between 10 per cent and 20 per cent today. Arman Financial Services, Morepen Laboratories, Gufic Biosciences, Punjab Chemicals and Crop Protection, Ambika Cotton Mills, Tanfac Industries, and Ruby Mills, on the other hand, rallied in the range of 7 per cent to 9 per cent in the intraday trade today.
Transformers and Rectifiers (India), Omaxe, PC Jeweller, Lloyds Enterprises, and Coffee Day Enterprises from the SmallCap index, meanwhile, were locked in the 5-per cent upper circuit with only buyers seen on these counters. Besides, a total of 30 stocks from the index hit their respective all-time highs on Thursday.
A sharp rally in the mid-cap and small-cap stocks are on back of strong inflow from the domestic institutional investors (DIIs). According to data available from the exchanges, DIIs have made net investments worth Rs 41,212 crore in equities thus far in the month of August (till August 21, 2024). They have been net buyers for 13 straight months. Since August 2023, DIIs have pumped in Rs 4.02 trillion in equities, data shows.
"The trend of sustained buying by DIIs and selling by foreign institutional investors (FIIs) continues. But the intensity of FII selling is declining. Retail investors are likely to continue with the buy on dips strategy which has been a consistently successful strategy in this bull market," said V K Vijayakumar, chief investment strategist, Geojit Financial Services.
Among individual stocks, TCI zoomed 20 per cent to Rs 1,249.95 in the intra-day trade today after the company announced share buyback plan. In an exchange filing, the company informed the board meeting of TCI will be held on Saturday, August 24, 2024, to consider, inter alia, a proposal for buyback of the fully paid-up equity shares of the company and the matters necessary and incidental thereto.
TVS Electronics, too, soared 17 per cent to Rs 421.45 on the back of heavy volumes. The company is a pioneer in information technology (IT) peripherals, point-of-sale solutions, field support services, electronics manufacturing services, and green energy services.
Precision Camshafts (Rs 233.70) and Varroc Engineering (Rs 618.40), the auto components & equipment manufacturers, meanwhile, climbed 16 per cent and 15 per cent, respectively.
The Indian automotive component business produces a vast array of parts for various vehicle types, including castings, forgings, completed and semifinished sections, assemblies and subassemblies.
It is expected that the Indian auto component market size will increase by $119.79 billion at a CAGR of 25.7 per cent between 2023 and 2028. This growth is anticipated to be supported by the growing middle-class population, surge in demand for compact SUVs and effective government initiatives and policies for easy automotive industry setup procedures, say analysts.
