The Nifty Midcap has lost 15.8% in 2018 so far, leaving investors with fairly large losses. Some 33 of the stocks have lost 25% each since the beginning of the current calendar year, with Vakrangee and PC Jeweller plunging as much as 88% and 80.5%, respectively. Interestingly, of the 135 trading sessions so far this year, 75 days saw the midcap gauge closing in the red.
The Nifty Midcap 100 index fell 2.6% on Monday to hit a near-one-year low of 17,794. Market breadth was firmly tilted in favour of sellers, as a result of which midcaps bore the brunt.
While state-owned lenders such as Bank of India and Union Bank of India have declined 54.5% and 48.4%, respectively, during the period, Canara Bank saw its shares coming off by 38.6%. Other public sector companies such as NBCC, MRPL, Engineers India, Housing and Urban Development Corporation (HUDCO) and National Aluminium also declined in the range of 33% to 50.2%.
Morgan Stanley believes that despite the recent drawdown the mid-cap valuations are still looking stretched. “Indian stocks are jostling weak emerging markets, rising rates, higher oil prices, an election year and relatively rich mid-cap valuations,” the brokerage said in a note to investors on Monday.
The recent PSU debutant — HUDCO, which listed at a 21% premium — has lost all the gains since listing and trades below its issue price of Rs 60.
Only 11 companies of the Nifty midcap index could give double-digit growth in 2018, with software companies like Mindtree, Mphasis and Hexaware Technologies leading the pack.
Nifty IT was the only sectoral index which managed to end the session with gains on Monday, ending the day 0.57% higher.