Small cap stocks outpaced benchmark indices as well as BSE Midcap index in the past one month. Consider this: During August 19-September 19, the BSE Smallcap index advanced 2.98 per cent, whereas BSE Sensex and BSE Midcap index gained 1.99 per cent and 0.75 per cent, respectively.
In the smallcap space, seven stocks surged over 50 per cent in the past one month. Patel Engineering surged the most — 135.95 per cent to Rs 105 on September 19. Shares of the company were trading at Rs 44.50 on August 19. It was followed by Binny Ltd (up 92.11 per cent), Hindustan Construction Company (up 70.15 per cent), Mandhana Industries (up 68.01 per cent), JBM Auto (up 58.09 per cent), Hindustan Composites (up 53.18 per cent) and SV Global Mill (up 51.83 per cent).
Patel Engineering and Hindustan Construction Company (HCC) shares are on rising spree after they informed bourses that the Cabinet decision that requires government agencies to pay 75 per cent of the arbitral awards is expected to reduce the company’s debt by 50 per cent.
Patel Engineering has won arbitration award in excess of Rs 2,500 crore. In a BSE filing, the company said, “With the recent Cabinet decision, the company will get 75 per cent of this amount immediately which will be utilised to retire debt.”
HCC has arbitration awards for over Rs 3,200 crore and with the decision, the company will get 75 per cent of this amount immediately. Similarly, claims worth around Rs 5,000 crore are in arbitration process. In a BSE filing, the company said, “The decision will further help HCC to secure these awards within a duration of 12 months.
On the other hand, companies such as Ojas Asset Reconstruction, Xchanging Solutions, Adhunik Industries, BS Ltd, Parsvnath Developers, JRI Industries, Castex Technologies, Ess Dee Aluminium and Usha Martin slipped between 20 per cent to 44 per cent in the past one month.