Small, mid-cap stocks beat blue chips so far this fiscal

While the mid-cap index has gained 2.31 <g data-gr-id="38">per cent</g> to 10,818.68, the small-cap index has seen a rise of 1.39 <g data-gr-id="39">per cent</g> to 11,042.60 from April 1 to October 1. In contrast, the 30-stock Sensex, consisting of large- caps, has lost 6.21 <g data-gr-id="40">per cent</g> to 26,220.95.

The index hit an all-time high of 30,024.74 on March 4, 2015. However, the gauge gave up most of the gains after that and touched one-year low of 24,833.54 on September 8.

Sensex crashed by 1,624.51 points on August 24 -- its biggest single-day fall -- wiping out over Rs 7 lakh crore from investors’ wealth on a sharp global sell-off triggered by the Chinese slowdown.

Markets have been highly volatile in the past couple of quarters on weak corporate earnings and negative global cues, including <g data-gr-id="46">devaluation</g> of the Chinese currency and fear of rate hike by the US Federal Bank. The mid-cap index touched its all-time high of 11,666.24 on August 10, <g data-gr-id="45">2015</g> and the small-cap index recorded its lifetime high of 12,203.64 on August 5.

Foreign investors, a key driver of the Indian stock market, have also turned sellers recently on account of various global and domestic factors. Marketmen say smaller stocks are generally bought by local investors, with overseas investors focusing on blue-chip shares. The mid-cap index tracks companies with a market value that is on an average one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.

Meanwhile, in a fresh crackdown on illegal money pooling scheme, markets regulator Sebi has barred Rahul Hi Rise and its directors from raising funds from investors till further directions. Besides, the company and its directors have been barred from the securities market. A probe by Securities and Exchange Board of India (Sebi) found that Rahul Hi Rise had mobilised nearly Rs 30 crore by issuing ‘Secured Redeemable Debentures’ to at least 100 investors during 2009 10 and 2010 11.

Since the shares were issued to over 50 people, the issuance qualified as a public issue which requires compulsory listing on a recognised stock exchange. It was also required to file a prospectus, which it failed to do. In an interim order passed on October 1, Sebi said that Rahul Hi Rise shall forthwith cease to mobilise fresh funds from investors through the Offer of NCDs or through the issuance of equity shares or any other securities, to the public and/or invite subscription, in any manner whatsoever, either directly or indirectly till further directions.”

The company and its directors -- Abhijit Majumdar, Dipankar Gupta and Mrinmoy Bose -- have been prohibited from buying, selling or otherwise dealing in the securities market, either directly or indirectly, till further directions.

They have been directed to provide a full inventory of all their assets and properties. Besides, they have been restrained from disposing of any property of the company without getting prior approval from Sebi.

Further, Sebi has prohibited debenture trustees -- <g data-gr-id="52">Dinendra</g> Nath Bandopadhyay and <g data-gr-id="55">Well Being</g> Trust (represented by <g data-gr-id="53">Chapal</g> Biswas and <g data-gr-id="54">Dinendra</g> Nath Bandopadhyay), from continuing with their present assignment in respect of issuance of securities in Rahul Hi Rise case and has also barred them from taking up any new assignment in a similar capacity.