Post SEBI diktat, brokerages zero-in on mid-, small-cap stocks

Our Bureau | | Updated on: Sep 14, 2020

AB Fashion, Leyland, Essel Propack, JK Cement are some of the top picks

Brokerages have started identifying possible stocks that could benefit from SEBI's new mandate on multi-cap schemes.

Last week, the Securities and Exchange Board of India came out with a circular mandating multi-cap funds to allocate at least 25 per cent of their assets under management to mid- and small-caps each. "Existing multi-cap funds are required to ensure compliance by January 2021," market regulator said.

According to Motilal Oswal FInancial Services, its high conviction mid-cap basket includes Aditya Birla Fashion Retail, JK Cement, Tata Power, Ashok Leyland and Dr Lal Path Labs, while its high conviction small-cap stocks are Birla Corp, IEX, Team Lease, Essel Propack and KEI Industries.

The top picks of HDFC Securities are MphasiS, ACC, Crompton Consumer, IGL, Gujarat Gas, Max Financial, JK Cement, Endurance Technologies, Persistent Systems and Aarti Industries in the mid-cap space, and CDSL, KNR Construction, Alkyl Amines, Galaxy Surfactants, Radico Khaitan, PNC Infratech, Brigade Enterprises, Sonata Software, Mastek and Ahluwalia Contracts in the small-cap space. Among mid-caps, Emkay Global's top ideas are Varun Beverages, Ashok Leyland, Max Financial, Vinati Organics and Crompton Consumer. In small-caps, it picked Equitas Holdings, Dixon, Radico Khaitan, Rallis, Kalpataru, KNR Constructions and JK Lakshmi.

Similarly, JM Financial has identified 36 stocks -- 19 from mid-cap and 17 small-cap categories. Among them are TVS Motor, Ashok Leyland, Apollo Tyres, Kajaria Ceramics, Gujarat Gas, AB Fashion, Cummins, Essel Propack, Cholamandalam Investment, M&M Financial and Jubilant Lifesciences in the mid-cap space and Ceat, Suprajit Engineering, Team Lease, Prince Pipes, PNC Infra, KNR Construction and Spandana Sphoorty in the small-cap space.

IDBI Capital picked 20 mid and small-cap stocks that include ACC, Jindal Steel & Power, Cholamandalam Investment, Bata India, Manappuram Fin, GSPL, Kajaria, MM Forging, Rites, APL APollo Tubes, Jamna Auto and Inox Leisure.

Most of these stocks posted significant gains on Monday.

Published on September 14, 2020
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