Mangalmay Journal of Management & Technology
Year : 2009, Volume : 3, Issue : 1
First page : ( 46) Last page : ( 50)
Print ISSN : 0973-7251.

Recent Performance of Mid-and Small-cap Stocks

Rajkumar K. Prabhakar, Lecturer

Department of Commerce, Periyar University. Salem. Tamilnadu.

Abstract

A terrible recession is sweeping the world, playing havoc with the lives of millions of people. An economic recession is a feature of an industrial, not agrarian, economy. This paper focuses on the financial performance of Mid and Small cap Stocks. We are bullish on the mid and small cap space. At present, Foreign Institutional Investors (FIls) are bullish on small and mid-cap companies in the Indian equity market but scarcity of research on a large number of mid and small caps is proving to be a hurdle in taking investment decision. In the ongoing Bull Run in the equity markets, the top 200 Indian companies have attracted much of the Foreign Institutional Investors' money, whereas the medium and small companies still remain under valued. The mid and small caps have fallen 50.58 per cent and 69.34 per cent respectively from their all time highs in January. The main reason for this is, when the markets are getting corrected, people sell their holding in the small and mid cap space as they feel that the larger stocks have more value in them and off load small-cap stocks initially. That is why there is always a correction gap of 15 per cent to 20 per cent between the frontline and smaller stocks. In addition when the markets start rallying there will be buying in the large caps first followed by mid-cap and small-cap stocks. This paper focuses on the analyses of recent financial performance of mid and small cap stocks in India.

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