Small-caps outperformed market

M-cap up 31.45% since June 2,'03

Small-cap stocks, with a market capitalisation less than Rs 25 crore, have outperformed the overall market in the last 45 days, both in terms of volumes and price.

Traded volumes and market capitalisation in small-cap stocks increased by 216.53 per cent and 31.45 per cent, respectively, in this period. The corresponding figures for all actively traded stocks on the Bombay Stock Exchange (BSE) are 26.6 per cent and 12.63 per cent.

Jignesh Shah, strategist, ASK Raymond James Investment Management, said: "The markets have seen a much wider participation in the period, with retail investors also coming in a big way.

Smaller companies that are priced very low but have become fundamentally stronger because of a variety of reasons (such as better financial management) have become good buys for investors."

The market capitalisation 941 actively traded small-cap companies on the BSE increased from Rs 6737.20 crore on June 2, 2003 to Rs 8855.75 crore on July 16. Of these stocks, the market capitalisation of 822 increased in the last 45 days. It decreased for only 119 stocks.

The top 15 small-cap companies have seen an over 200 per cent increase in their market cap in the last 45 days. The traded volumes in Shah Alloys increased 1620 per cent from a total of 15,251 in the week ended June 6 to 2,62,302 shares in the week ended July 7. The market cap of the company increased 140 per cent to Rs 48.65 crore (Rs 20.27 crore) in the period.

Traded volumes in JK Synthetics jumped 302 per cent to 5,42,425 (1,34,855). Its market cap increased 95 per cent to Rs 43.54 crore (Rs 22.36 crore).

Similarly, traded volumes in Bhansali Engg Polymers doubled to 2,42,016 (1,20,023) over the same period and its market cap increased 139 per cent to Rs 44.89 crore (Rs 18.74 crore).