sensex rally: Sensex ends 2023 with 11,000 points rally in what has been a really great year.
The market capitalization of all BSE listed stocks increased from Rs 81.6 lakh crore to Rs 364 lakh crore. After crossing the $4 trillion M-Cap milestone, India appears poised to take over Hong Kong and become the world’s fourth-largest stock market.
small cap street
But the real money was made by those betting on ‘chota’ stocks on Dalal Street, where “small stocks give big returns” has become the new mantra of the retail crowd.
At least 238 companies with a market valuation of at least Rs 1,000 crore (till December 28) have delivered multibagger returns of up to 2,961%, making Nifty’s 20% annual returns look like peanuts.
Nifty Midcap 50 is up 50% this year, while Nifty Smallcap 100 is up around 55%. While all sectoral indices ended 2023 in the green zone, the Nifty PSE index topped the charts with returns of around 80%. Real estate and automobiles were the big themes by sector, with Nifty Realty up 80% and Nifty Auto up 46%.
Within the blue-chip Nifty50 pack, only Tata Motors doubled investors’ wealth, and that too on the last trading day of the year. NTPC, long ignored by both institutional and individual investors, was the second best Nifty performer with a return of around 87%.
Bajaj Auto, L&T, Coal India and Hero Moto were the other top gainers. Adani stock is still struggling to emerge from its Hindenburg hangover and remain the biggest wealth destroyer this year.
Domestic institutional investors (DIIs) led by MFs poured funds worth Rs 1.8 million into Indian equities, while foreign investors were net buyers worth around Rs 1.6 million.
New Age stock has finally succeeded in convincing investors that management is willing to sacrifice growth to focus on profitability. Paytm rose 20% in 2023 while Zomato surprised with a mouth-watering 104% rise.
GMP becomes the new IPO index
Small business IPOs have become a new opportunity for investors willing to take on extra risk to find someone who doubles their money. The BSE SME IPO index is up about 97% this year as four out of five SME IPOs have delivered positive returns. The gray market premium, or GMP, has become the unofficial index for determining which IPOs to file for.
Within the mainboard IPOs, Tata Technologies, Cyient DLM, Senco Gold, IREDA, EMS, Utkarsh SFB, Vishnu Prakash Punglia and Signature Global made investors richer.
2023 is now the eighth consecutive year that Nifty has delivered positive returns. The index’s 4% decline in 2015 was fueled by the massive 31.4% upside seen the previous year.
Will 2024 be different?
2024 may be a new year, but it could also be another year in which new investors, especially those who have never seen a bear market before, learn old lessons.
“We expect the Indian market to likely fall 20% before the end of 2024. So, investors are advised to book profits whenever there is an uptick,” said Amit Goel, co-founder and chief global strategist at Pace 360.
Kotak Institutional Equities also warned that it would be best to enter 2024 with low market return expectations. However, all warning signs related to valuation and overbought conditions fail to find takers because there are no bears left on the street when everything “looks like wow”.
(Data: Ritesh Presswala)
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