BSE SmallCap sinks 2%, MidCaps bleed too: IIFL Finance, MGL slump up to 20%

Shares of Mid and Smallcap companies were under sharp selling pressure on Wednesday with the BSE Smallcap and Midcap indices sinking up to 2 per cent intra-day. 

In comparison, there was a 0.11 per cent decline in the S&P BSE Sensex. With today's decline, the BSE Smallcap index has slipped 5 per cent from its record high level touched on February 7.

IIFL Finance, JM Financial, Mahanagar Gas, Indiabulls Real Estate, Bodal Chemicals, Mangalam Cement, Mannapuram Finance, NCL Industries, PNB Gilts and Capri Global Capital from the Smallcap index slipped over 5 per cent.

L&T Housing Finance, Solar Industries, General Insurance Corp, Indraprastha Gas, Aditya Birla Capital, Samvardhana Motherson and Macrotech Developers from the Midcap index also shed over 5 per cent each.

Those, which hit their respective 52-week lows, from the two broader market indices inluded Zee Entertainment, Barbeque-Nation Hospitality, Hinduja Global, KRBL, RHI Magnesita India, Tatva Chintan Pharma, TCI Express, Timken India and VRL Logistics. 

Suzlon Energy, Indox Wind, TV18 Broadcast, Network18 Media, Wockhardt, Inox Wind, Zen Technologies and PC Jewellers were among those 14 stocks that were locked in their respective lower circuits on the BSE.

Individually, IIFL Finance was also locked in the 20 per cent lower circuit for the second day. The stock of the NBFC hit a 52-week low of Rs 382.80 and has tanked 38 per cent in the past three trading days after recent RBI action. 

The central bank on Monday barred the NBFC from sanctioning or disbursing gold loans or assigning/ securitising/ selling any of its gold loans. The regulator has, however, allowed IIFL to service its existing gold loan portfolio through the usual collection and recovery processes.

Meanwhile, the RBI on Tuesday barred JM Financial Products from providing any form of financing against shares and debentures, including sanction and disbursal of loans against initial public offering, with immediate effect. 

Shares of JM Financial tanked 19 per cent to Rs 77.10 on the BSE in intra-day trade today. 

Among others, Mahanagar Gas plunged 14 per cent to Rs 1,343.55 in intra-day trade after the company reduced the price of compressed natural gas (CNG) by Rs 2.50 per kg in and around Mumbai following a reduction in gas input costs for the company. READ MORE

CNG will now cost Rs 73.50 per kg, effective from today, March 6, the company said in a statement

Meanwhile, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said the underperformance of the Smallcap index is likely to continue ahead since valuations in this space continue to be excessive.