The retail investor bloodbath in smids might just be the beginning

livemint.com:

Subscribe to enjoy similar stories. The recent correction in indices comprising small and mid-size companies (smids) may not be the end of the bloodbath for retail investors, with industry veterans pointing out that these stocks remain expensive. The Nifty Midcap 150 index has corrected 12.5% from its record high of 22,515.4 points on 25 September through Friday's closing of 19,708.95.

In that period, Kalyan Jewellers Ltd, ZF Commercial Vehicle Control Systems India Ltd, wind turbine maker Suzlon Ltd, Godrej Properties Ltd, and industrial gases producer Linde India Ltd have lost between 33% and 39%, per analytics firm IndiaCharts. The Nifty Smallcap 250 index has fallen 14.4% from a record high of 18,688.3 on 24 September to 16,001.7 on Friday. In that period, Sterling & Wilson Renewable Energy Ltd shed almost half of its share price to ₹338.6 apiece, while skincare brand Mamaearth’s owner Honasa Consumer Ltd, Inox Wind Ltd and realty firm Sobha Ltd have lost 43-49%.

In all, 92 out of 250 stocks in the smallcap index have fallen by more than 20% while 54 out of 150 stocks in the midcap 150 index have corrected below 20%, said Rohit Srivastava, founder of IndiaCharts. Meanwhile, retail investor holdings through mutual funds in certain midcap and smallcap companies have increased. In counters like Sobha, mutual funds increased their holding to 22.63% in the December quarter from 21.80% in the September quarter.