Smaller stocks in limelight; give higher returns to investors this fiscal

Representative image

Smaller stocks have rewarded investors with high returns as the smallcap index jumped by 29.72 per cent so far this fiscal, outshining its bigger benchmark gauge.

An analysis of the performance of smaller stocks in the first four months of the ongoing fiscal revealed that the BSE smallcap index has zoomed 6,137.29 points or 29.72 per cent, while the midcap index has jumped 2,905.91 points or 14.39 per cent.

In comparison, the 30-share BSE benchmark Sensex has gained 3,077.69 points or 6.21 per cent.

"The sheer variety across themes and sectors aided by a low-base effect made them low hanging fruits as valuations vis-a-vis growth made a case in their favour," said S Ranganathan, Head of Research at LKP Securities.

The midcap index zoomed to its record high of 23,207.51 on July 23, and the smallcap index reached its all-time high of 26,895.93 on July 30. The BSE benchmark had reached its lifetime high of 53,290.81 on July 16.

VK Vijayakumar, Cheif Investment Strategist at Geojit Financial Services said, "Market performance has been incredible. In fact, the broader market has done much better than the benchmark indices. The outperformance is stunning, giving excellent returns to investors in the broader market."

Analysts said that pickup in economic activities and ramp-up of vaccination have also helped market rally.

Last fiscal, the BSE smallcap index zoomed 11,040.41 points or 114.89 per cent, while the midcap jumped 9,611.38 points or 90.93 per cent. In comparison, the BSE benchmark clocked 20,040.66 points or 68 per cent gain last fiscal.

According to market analysts, smaller stocks are generally bought by local investors while overseas investors focus on bluechips or large firms.

The midcap index tracks companies with a market value that is, on an average, one-fifth of bluechips or large firms. Smallcap firms are almost a tenth of that.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel