Small cap stocks post biggest single day jump in 6 years after SEBI circular

Agencies
September 15, 2020

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Mumbai, Sept 15: The small cap index posted its biggest single day gain in over six years on Monday after the SEBI circular on multi cap mutual funds triggered buying.

The estimates by analysts and brokerage houses indicate that the net inflow from large caps would be around Rs 27,000 crore into the small caps and around Rs 13,000 crore into the mid caps following the SEBI circular to invest 25 per cent each of assets of multi cap funds into large, mid and small cap stocks.

The huge rally in small cap stocks has come even after fund managers asked investors not to rush to buy small cap stocks in haste and there were clarifications that mutual funds have several options apart from rebalancing their schemes including a merger of schemes to comply with the circular.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said mid-cap and small cap stocks gained sharply.

He said investors were attracted towards Mid/small caps due to the SEBI mandate to Multicap mutual funds to invest a minimum of 25 per cent each in large, mid and small cap stocks. Small Cap Index posted its biggest 1-day gain in over six years.

Deepak Jasani, Head of Retail Research, HDFC Securities said that the recent SEBI circular on allocation by Multicap schemes spurred buying in a lot of small and midcaps in anticipation of fund buying that could emerge later to adhere to the new regulation. The Nifty midcap index ended 2.6 per cent higher while the smallcap index gained 5.6 per cent - the most since May 2014.

Nifty has ended the first day of the week in the negative while the broader market has reacted positively to the latest SEBI circular, he added.

In a note to investors, Sage One has said that SEBI had done a big re-categorization of mutual funds (MFs) in early 2018 which triggered initial rotation from small/midcaps to large caps, and the falling prices created their own snowball effect resulting in the small cap universe correcting by 40-60 per cent. During this period the large cap indices delivered positive returns. In the latest re-categorization of multi-cap MFs, a small part of the 2018 action has been reversed.

As per the note, institutional shareholding (SH) in large cap space is currently 20 per cent above the December 2017 levels whereas it's 41 per cent lower for the small cap space.

The total institutional holding has increased by 10 per cent during this period. Small cap companies make up 10% of the total market capitalization, but the institutional holding is only at 5.3 per cent of their total holding. In December 2017 small cap companies made 16 per cent of the total market capitalization. The biggest contribution in the market drop was the forced selling by the domestic institutions. As prices dropped, it forces other investors to move out and seek performing asset classes such as the large caps, the note said.

The note said that whether MFs actually do the entire re-allocation or whether they merge their multi cap schemes into the large cap schemes is an unknown.

"Irrespective of the amount that actually gets re-allocated, just the anticipation could bring in fresh capital in small/mid cap schemes under MFs, PMS' and AIFs. It doesn't take much inflow to move stocks in this universe," the note said.

The research notes that the impact cost of actual exits was as high as 15 times in the small cap space. This means that if one was to invest fresh capital of Rs 1,000 crore in the small cap companies, on an average their market cap would go up by Rs 15,000 crore. There will not be enough sellers available when the expectation is that this space would do well in presence of forced buyers.

"Even if we assume that only half (Rs 13,500 crore) the capital would be re-allocated by the MFs and assume that there will be no fresh inflows in the small cap companies by other investors and in addition even if we assume that the buying impact would be half (7.5x), the increase in the market cap of the small cap universe would be more than Rs 1 lakh which is around 36% increase in total market cap (currently Rs 2.80 lakh crore) of the small cap companies," the research said.

This step would benefit more than 1000 companies compared to just 100 companies that benefited by the 2018 circular. In an environment when debt raising is multiple times difficult for the smaller companies, this SEBI triggered change would help equity raising capability of these companies.

HDFC Securities said in a note that given the size of multicap funds and higher allocation especially to smallcap stocks; some concerns have been raised about achieving the prescribed investment limits without creating a bubble in small and midcap stocks.

The AUM of smallcap stocks across equity categories (excluding sectoral) as on July 2020 is Rs 68,109 crore – compare this with Rs 28,000 crore worth fresh buying required.

"These stocks have less free float availability, relatively lower volumes, corporate governance issues and higher impact cost (both at the time of getting in and getting out). Also, liquidity issues in smallcap stocks could get compounded in bear markets when these funds face redemption pressure and are required to sell small cap stocks where impact costs could be large," it said.

Schemes requiring the least reshuffling include multicap funds from Invesco, IDFC and Nippon, while schemes requiring the most reshuffling include Kotak Standard, HDFC Equity, Motilal Multicap 35, Axis and Canara Robeco Eq diversified fund, HFDC Securities said.

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News Network
April 8,2025

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Bengaluru: The results of the PUC 2 examination one were announced today with an over all pass percentage of 69.16 as against the 81.15% in the 2024 exam 1.

Due to several examination reforms, including installation of Artificial Intelligence (AI) enabled CCTV cameras in the examination hall to check malpractices and webcasting of the entire process, the results seem to have dipped by 11.99% compared to the previous year.

The results will be available online after 1:30pm. Candidates can visit http://karresults.nic.in to check their results.

Amoolya M Kamath from Expert PU college Dakshina Kannada, Deeksha R from Vagdevi PU College Shivamogga have topped the state in science stream by scoring 599 for 600.

In Commerce Deepashree S from Canara PU College Dakshina Kannada emerged as topper with 599 out of 600 and in Arts LR Sanjana Bai of Indu Independent PU college Kottur in Ballari bagged the first place by scoring 597.

Minister for School Education and Literacy Madhu Bangarappa released the results and said, "students those who have failed or those who wish to improve their marls can take exam 2 and 3. We will not be charging any fee for exam 2 and 3."

"I will not say students are failed. As the exam process will complete only after 3rd exam, we have hopes to improve the results by 3-4%," he mentioned.

"We have opportunity to improve the results. We have conducted the exams with complete vigil by preventing all the malpractices by monitoring through webcasting," said the minister.

For exams 1 total of 6,37,805 were appeared of which 468439 managed to clear the exams.

This time department has not given any grace marks, except the one which awards to push those who were in border line. "There were over 8297 students in the borderline and pushed with the grace as per scheme of evaluation," the minister added.

Udupi Leads Again

The coastal district of Udupi has emerged as the top performer once again, recording a remarkable 93.90% pass rate, as per a report on One India. Dakshina Kannada followed closely with 93.57%, while Bangalore South stood third at 85.36%. At the bottom of the list, Yadgir reported the lowest pass percentage with 48.45%.

Here are the top 10 performing districts:

Udupi – 93.90%
Dakshina Kannada – 93.57%
Bangalore South – 85.36%
Kodagu – 83.84%
Bangalore North – 83.31%
Uttara Kannada – 82.93%
Shimoga – 79.91%
Bangalore Rural – 79.70%
Chikmagalur – 79.56%
Haveri – 76.56%

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Agencies
April 6,2025

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New Delhi, Apr 6: President Droupadi Murmu on Saturday gave her assent to the Waqf (Amendment) Bill, 2025, which was passed by Parliament earlier this week.

Murmu also gave her assent to the Mussalman Wakf (Repeal) Bill, 2025.

"The following Act of Parliament received the assent of the president on April 5, 2025, and is hereby published for general information: The Waqf (Amendment) Act, 2025," the government said in a notification.

Parliament early on Friday approved the Bill after the Rajya Sabha gave its nod to the contentious legislation following an over 13-hour debate.

The discussion witnessed staunch objections from opposition parties, which termed the Bill "anti-Muslim" as well as "unconstitutional", while the government responded that the "historic reform" would benefit the minority community.

The Bill was passed in the Rajya Sabha with 128 members voting in favour and 95 opposing it.

It was passed in the Lok Sabha early on Thursday, with 288 members supporting it and 232 against it.

Parliament had also approved the Mussalman Wakf (Repeal) Bill, with the Rajya Sabha giving its nod. The Lok Sabha had already given its assent to the Bill.

After the president gave her assent, it has also become a law.

Congress MP Mohammad Jawed and All India Majlis-e-Ittehadul Muslimeen (AIMIM) president Asaduddin Owaisi on Friday challenged the validity of the Waqf (Amendment) Bill in the Supreme Court, saying it violated constitutional provisions. 

Jawed's plea alleged the Bill imposed "arbitrary restrictions" on Waqf properties and their management, undermining the religious autonomy of the Muslim community.
The petition, filed through advocate Anas Tanwir, said it discriminated against the Muslim community by "imposing restrictions that are not present in the governance of other religious endowments".

Jawed, the Lok Sabha MP from Kishanganj in Bihar, was a member of the Joint Parliamentary Committee on the Bill and alleged in his plea that it "introduces restrictions on the creation of Waqfs based on the duration of one's religious practice".

In his separate plea, Owaisi said the Bill took away from Waqfs various protections accorded to Waqfs and Hindu, Jain and Sikh religious and charitable endowments alike.

Owaisi's plea, filed by advocate Lzafeer Ahmad, said, "This diminishing of the protection given to Waqfs while retaining them for religious and charitable endowments of other religions constitutes hostile discrimination against Muslims and is violative of articles 14 and 15 of the Constitution, which prohibit discrimination on the grounds of religion."

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News Network
March 28,2025

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When the ground violently shook beneath his feet, Prem Kishore Mohanty, an Indian expatriate in Bangkok, was attending his five-year-old daughter's school sports day. What began as a routine event—children competing, parents cheering—quickly turned into a moment of panic as tremors struck.

"I felt my head spinning and had to sit down. The overhead lights swayed, and chairs moved," said Mr. Mohanty, 44. The school's PA system quickly announced an emergency evacuation, directing everyone to the outdoor field while warning against using nearby lanes lined with high-rise towers.

Water from rooftop swimming pools, including those at the InterContinental Bangkok, cascaded down buildings, as captured in viral videos.

Fear and Chaos as Bangkok Shakes
The 7.7-magnitude earthquake, with its epicenter in Myanmar, sent powerful tremors into Thailand, bringing Bangkok to an abrupt standstill. Public transport was suspended, traffic snarled, and people evacuated buildings, waiting anxiously for the all-clear.

Earthquakes are rare in Bangkok, a city more accustomed to heat and monsoons than seismic shocks. For the Mohanty family, who live in a high-rise apartment in Sukhumvit, confusion and fear gripped them as the evacuation began.

"It was terrifying. We were told to take the fire escape stairwell and wait outside. There was no time to think," Mr. Mohanty recalled.

Now safe, he remains shaken by the unexpected jolt that turned a normal day into a moment of chaos for his family and thousands across the city.

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