Smallcap Space News Today

Vipul Prasad says: “ It is not stretched at all for Nifty 50, so that is the point here and that is why we are saying that there is no point in trying to act smart and trying to outpace the market. Just stay invested and this is what we are doing. We are fully invested.”

Ashi Anand says: “Timing when the markets will turn and when largecaps will start delivering more than small and mid, is very difficult. But the danger with investing in smallcaps at this point in time is that when markets turn, what you have seen historically is that when small caps fall, they can fall very, very sharply and at very low liquidity. So you may not be able to get out.”

"Unpopular, unloved, and unacknowledged entities have surprisingly performed well, which is a typical characteristic of a new bull market. In order to witness new leadership, it is necessary for it to emerge from extreme unpopularity. This phenomenon has been observed time and again. However, caution must be exercised in the SME and option segments, as there might be a potential bubble forming."

"Equity as an asset class is only gaining more acceptability with domestic investors which is visible from the continuously increasing SIPs with mutual funds. Even at this, it still makes up to about a mere 4.8% of Indian household savings – which is substantially lower than its global peers. As the GenZ comes into the mainstream, we expect this number to only get better, leading to a much stronger and continued domestic flows."

Valuations in Indian largecaps are reasonable and we expect 15% or more earnings growth in the next couple of years. Sectors and sub-sectors like capital goods, defence, railways capex, electronics and durable manufacturing, construction, renewable power, power transmission & distribution, China-plus-one theme plays, beneficiaries of the production-linked schemes, chemical and pharma companies etc. are mostly represented only in the mid and smallcap space.

“Sensible value will be emerging where you have some disappointments which might come up in the next couple of quarters. Tech is one space where there has been some disappointment but there will still be some challenges as we get along and there already we have seen one leg of valuation correction of 30%-40% especially in the largecap side.”

“If you trust your money to a mutual fund manager, who brings his expertise in terms of stock picking not only to the diversification across large, mid and smallcaps but also across the sectors, I will find this to be as good a time to invest as any. And finally, because the markets are reaching new highs, it does not mean that markets are overpriced.

"The tide has lifted all the boats in this space. Amid Indias buoyant equity markets as well as strong institutional and retail liquidity, several stocks with low public float have also surged this year. We believe caution is warranted in those names with a lower free float amid a lack of liquidity and low institutional ownership. The recent sharp price cuts across this space have showcased the underlying risk involved."

"Its time to be sector-specific if not company-specific. Sectors that are reliant on domestic business will continue to do relatively well compared to companies that are overly reliant on exports. Rather than investing in a high-level mid-, small-, or largecap fund, thematic fund investing would be the ideal approach. As the Indian economy prepares for the catapult, some sectors would outperform for a prolonged period."

"The Indian economy is witnessing a revival in capex, which is being driven by strong government spending and private investment in key sectors such as infrastructure, capital goods, renewables, oil and gas, automobiles, and certain brownfield upgradation capex. ROEs have been remarkably resilient and improving in the BFSI segment, especially for lenders."