BSE Small-cap index zooms over 100% from its 52-week low

Gati, Ceat, Avanti Feeds, Ahluwalia Contracts & Marksans Pharma are from 15 stocks that rallied over 500% since September last year.

Shares of small-sized companies are on a roll with the Bombay Stock Exchange (BSE) small-cap index hitting nearly four-year high today rising over 100% from its 52-week low.

The small-cap index crossed 11,000 marks at 11,122 points in intra-day trade today, rallying 103% from its 52-week low of 5,428 touched on September 25, 2013. The Sensex and the Mid-cap index have gained 36% and 77%, respectively, during the same period.

The BSE small-cap index, which tracks the performance of companies with relatively lower market capitalisation, touched its highest level since November 2010. The index hit a record high of 14,239 in January 2008.

A strong buying from the foreign institutional investors (FIIs) and improved financial performance led the rally in these stocks.

FIIs have pumped in nearly $21 billion (Rs 125,000 crore) in Indian equities during the period. Since September last year, they have increased their stakes in about 100 small-sized companies, the latest shareholding pattern data shows.

Better economical indicators boosted FII’s inflow in Indian markets and Indian markets have been one of the most preferred investment destination.

“India’s economy expected to grow at 5.7% to 5.9% during current fiscal year” finance ministry guided in a statement.

Strong economic indicators including rise in GDP and IIP and subdued inflation has shown signs of India’s economic revival.

Meanwhile, of the 439 companies in the small-cap index, the market values of half or 234 stocks have more-than-doubled since September last year; of these, 118 stocks rose 200%-4,000%.

Among the stocks in this index, Gati, Ceat, Avanti Feeds, Ahluwalia Contracts, LG Balakrishnan and Brothers, Marksans Pharma, Global Offshore Services, Sona Koyo Steering Systems, Kitex Garments and CCL International have rallied more than 500% during this period.

The market price of Sanghi Industries has appreciated by 255% to Rs 51.45 from Rs 14.50 on September 25 last year. On Tuesday, September 9, Reliance Mutual Fund bought 3.26 million shares of Sanghi Industries at Rs 44.50 a share via a bulk deal on NSE.