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Goel’s battered smallcaps stage solid rebound; look which stocks rose most

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NEW DELHI: While the bulls have started roaring on Dalal Street, initial signs of recovery in smallcaps were visible since the beginning of September.

The BSE Smallcap index has settled higher in 12 out of last 15 sessions, taking its monthly gains to 8.25 per cent, the highest since March, 2018. This has set off a rally in many of the battered stocks of smallcap investor Anil Kumar Goel.

Data showed his portfolio stocks have rallied up to 52 per cent against a 4.4 per cent rise in Sensex. Among them is Star Paper Mills, which has rebounded 52.69 per cent this month, after falling 42 per cent in first eight months.

Goel held 3,09,000 shares, or 1.98 per cent stake, in the company as of June 30.

Year to date, this stock is still down 11 per cent.

Dhampur Sugar Mills, in which Goel held 70,00,000 shares or 10.54 per cent stake worth nearly Rs 150 crore, is up 47.25 per cent this month against an 8 per cent drop in the first eight months.

The scrip is up 35 per cent year to date. Shares of Shivam Autotech have surged 40 per cent this month, trimming year-to-date losses to 40 per cent from 57 per cent in August.

Goel owns 4,20,000 shares, or 1.42 per cent stake, in the auto ancillary company. Same is the case with IG Petrochemicals, where a 31 per cent rally in September cut 2019 losses to 56.11 per cent against a 66.73 per cent drop earlier.

Goel owns 1.89 per cent in the stock. Thirumalai Chemicals, South India Paper Mills, Amarjothi Spinning Mills and Dwarikesh Sugar Industries are some of his portfolio stocks that have generated 16-28 per cent this year, trimming the losses. Meanwhile, some of his portfolio stocks such as Majesco Auto, Avadh Sugar, Dwarikesh Sugar and Triveni Engineering have continued to perform well, rising 12-23 per cent in September (19-51 per cent year-to-date). Back-to-back policy announcements by Finance Minister Nirmala Sitharaman boosted domestic sentiment in September, even as foreign investors continued with their selling spree.

Mutual funds, retail investors and HNIs usually buy smallcaps.

FPI buying remains restricted to largecaps and select midcaps.

“The entire BSE midcap and smallcap baskets are trading well below their historic levels, probably one standard deviation below, and therefore what this ongoing move could do is to raise the number of stocks that investors could look at,” said Abhiram Eleswarapu of BNP Paribas. “We have had a very narrow move so far.

That is the first-order impact.

The second-order impact is more interesting, and that is the impact on the real economy, which is much more difficult to quantify.

It may not happen in the next few days, probably in the next few months or years.

The tax cuts should boost infrastructure spending, setting up new capacity,” Eleswarapu said.




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