Analysts remain cautious on mid-and-smallcap segments and suggest earnings need to catch up before the stocks start to recover
Some investment bankers argued that the reason for tepid fundraising through QIPs and rights could also be due to the fact that companies this year were not in need of large capital
In the aftermath of the pandemic, the BSE MidCap Index had risen for 14 consecutive weeks, clocking 29% gain
Small-cap index still down 17% YTD, even as Nifty50, mid-cap indices back in green.
The mid-and small-cap indices on the BSE were down over 1 per cent each as against a similar per cent gain on the S&P BSE Sensex so far this year.
Gains in some of the stocks in these two segments have been phenomenal. Shares of Brightcom Group, for instance, zoomed over 2,500 per cent in 2021
A quick calendar year-to-date price check on the stocks from the categories put under 'Add-on Price Band Framework' by the BSE reveals a total of 210 stocks have seen their price more than double
In past one month, the BSE Smallcap index outperformed the market by surging 9 per cent, as compared to 4.7 per cent gain in the Midcap and 0.53 per cent risen in the benchmark Sensex.
At 02:04 pm, the S&P BSE Midcap, the top gainer among broader indices, was up 1.5 per cent after hitting an intra-day high of 20,234 on the BSE
Higher earnings growth, lower costs, and valuations favour smaller companies
Continue to cede ground to family enterprises, private sector firms
All that happened in the markets today
Going ahead, most analysts expect the mid-and small-cap segments to continue doing well as compared to their large-cap peers, which they feel are now fairly valued
ICICI Securities, Reliance Nippon Life, Berger Paints, Whirlpool of India, IGL, AU Small Finance and Motilal Oswal Finance have rallied more than 40% from April 3, 2019 levels.
Market experts believe 2020 could be the comeback year for mid- and small-caps.
The smallcap index touched 11,951 levels, its lowest level since December 29, 2016, while the midcap index hit a low of 12,915, its lowest level since February 1, 2017
The BSE Midcap index, which was down 13.5 per cent in the first six months of 2018, has recovered nearly 4.5 per cent since then