Interestingly, it is not only the bigger finance companies which are having a dream run on the bourses. Even lesser know companies, which where hitherto hardly traded, have been hitting their new highs. Take for instance, Kotawala Securities. The scrip in eight trading sessions has gained by 500 per cent from Rs 1.5 to Rs 9. On Wednesday, the scrip touched a new high of Rs 9.95. DCM Financial's scrip has trebled from Rs 2 to Rs 6 in last eight trading sessions on Mumbai Stock Exchange(BSE). On the National Stock Exchange, the scrip touched a high of Rs 6.75. Reliance Capital, the only finance company scrip in Group A of BSE, has been hitting the upper band of the filter for last seven trading sessions. The scrip has gained 75 per cent from Rs 50.25 on October 8 to current level of Rs 88, its two year high.

So what has rejuvenated interest in this `sunset' sector? There has been a combination of factors. First, with the economy picking up, demand for finance is expected to pick-up. Already sales of consumer goods and cars have accelerated. Second, booming capital markets have provided these companies an opportunity to churn their portfolios by exiting poor quality stocks. The rising Sensex has also led to a higher asset values of their holdings. Bullish sentiment in the secondary market has percolated to primary markets which in other words means demand for merchant bankers. The revived primary market has also provided these finance companies with an another business avenue - IPO financing. Last but not the least, opening up of the insurance sector has provided these companies with a bigger play ground. As these companies have already established retail network, it will give them an edge over the new players. The retail mass will help them strike a better deal with foreign companies interested in enteringinsurance segment. Some of the finance companies have already expressed their desire to tap the insurance sector and they have entered into MoUs with foreign insurance companies for this purpose.

Since bigger companies have a better bargaining power than their peers who have lesser reach, their stock have been the in keen demand. Interestingly, finance companies belonging to business houses are the most sought after. Reliance Capital gained by 75 per cent in last nine trading sessions, Birla Global is up by 54 per cent, Hinduja Finance up by 50 per cent, India Securities up by 48 per cent, Escorts Finance up by 39 per cent, DCM Financial by 200 per cent and Onida Finance is up by 167 per cent. Although return in Tata Finance is only 6 per cent in the last eight sessions, the scrip is currently changing hands at its two year high of Rs 90.35. Not all finance companies are having a good time at the bourses. On Wednesday, Manraj Housing Finance, Meghana Finance, Roselab Finance and Tatia Financial hit their 52 week lows.