Shares of nearly 15% or 507 of the actively traded companies have touched all-time lows in the current calendar year with more than half of these scrips collapsing in June alone,as a depreciating rupee continues to spook FIIs.
However,even as overseas inflows ebbed,large caps have been relatively better off as only four such scrips have touched their all-time lows in CY13. Small caps,on the other hand,have failed to stay afloat as 499 stocks have been battered down to their lifetime lows. Nine mid-cap companies have seen such sharp decline in stock valuations in the current calendar year.
Experts say historically mid- and small-cap companies have shown a tendency to behave in a more volatile manner in an uncertain market and this time is no different. The smaller companies will continue to suffer due to the slump in growth. Until there is an uptick,revival is unlikely, said Pankaj Pandey,head (research),ICICI Securities. In June,FIIs have already sold nearly $1.9 billion worth of shares as the rupee has depreciated 6.5%.
Interestingly,while the BSE IT Index has gained nearly 5% over last two trading session as the fall in rupee is attracting investments,the sector along with realty and construction,has also seen the most number of scrips (35) crack in June. There is concern regarding consolidation in the smaller IT companies,which is putting the stocks under pressure, Pandey added.
The non-banking financial companies (NBFCs) have seen 22 scrips touch new lows in June. Sectors such as,capital goods (14),metals (11) and pharmaceuticals (10) follow suit.
Among NBFCs,Muthoot Finance hit its all-time low of R88 on Tuesday. The gold loan company has been under pressure due to fall in prices of the yellow metal and tighter regulatory framework. The telecom infrastructure provider,Bharti Infratel fell to its low of R140.5 on Tuesday. Within the power sector,Coal India recorded its historical low of R 286.15 on Wednesday.
With rupee at 60,the cost of foreign debt will exponentially rise. Investors are not taking any chances with result season just around the corner, said AK Prabhakar,senior VP,equity research,Anand Rathi Financial Services.