Nifty Next 50 represents the next rung of largecap stocks by way of market capitalisation after the 50-stock Nifty 50 and the latter’s gains have been 28% in the past 12 months.
Divam Sharma, Founder and Fund Manager at Green Portfolio PMS sees mutual funds and ETS responsible for the heightened action in the stocks of Nifty Next 50 index along with participation of retail investors over the last few quarters. “New age business models and hot sectors like power have attracted significant capital from investors resulting in the index outperforming. We believe that this trend could continue over the coming quarters,” Sharma said.Nifty Next 50 high flyers
Tata Group’s Trent, set to enter Nifty 50 on September 30 as part of the NSE rejig, has been a star in the pack with returns of 244% in the last 12 months. It has been supported well by Zomato, Power Finance Corporation (PFC), REC, Hindustan Aeronautics (HAL), Indian Railway Catering and Tourism Corporation (IRCTC) and Bharat Electronics (BEL) with returns between 105% and 165%.
On the performance of stocks like Zomato and Trent, Sonam Srivastava, Founder and Fund Manager at Wright Research said that defensive stocks such as these two have also performed well, reflecting a broader preference for more stable investments in uncertain market conditions.
Apart from this, 39 stocks gave double-digit returns between 98.51% and 11.47%. Among them are five Adani Group stocks viz. Adani Green Energy (96%), Adani Power (88%), Ambuja Cements (44%), Adani Total Gas, (33%) and Adani Energy Solutions (24%) while Vedanta has yielded 93%.
SRF has given single-digit returns while Berger Paints’ returns are positive but less than 1%. Shree Cement (-0.24%) and SBI Cards And Payment Services (-7.93%) have been top laggards.
In terms of number of stocks, Nifty Next 50 has the highest representation from BFSI (13 stocks) — 3 banks, and all of them PSUs, 7 NBFCs and 3 insurance stocks. Other prominent sectors are capital goods and FMCG.
Aamar Deo Singh, Senior Vice President-Equity, Commodity & Currency at Angel One said that the CAGR of this index over the past 2 decades outpaces the Nifty 50 returns by a couple of percentage points, and some of the stocks such as Trent, PFC, REC and Zomato, “have indeed delivered superior returns for its investors”.
Midcaps
Apart from Nifty Midcap 100, other indices which represent midcap stocks are Nifty Midcap 50 (40% returns in one year), Nifty Midcap 150 (41%) and Nifty Midcap Select (42%).
In the Nifty Midcap space, 16 stocks have given returns in the excess of 100%. The highest returns are from railway PSU Rail Vikas Nigam Limited (RVNL, 280%). It is followed by Oil India and Suzlon Energy with returns of 233% and 214%, respectively. Other top performers include Cummins India, Bharat Dynamics, Dixon Technologies, Hindustan Petroleum Corporation (HPCL), Kalyan Jewellers, Oracle Financial Services, PB Fintech (Policybazaar) which have rallied between 116% and 169%.
A dozen stocks in this index have seen their price erode over a 1-year period. The biggest losses have been recorded by Zee Entertainment Enterprises (Zee) and One 97 Communications (Paytm) with negative returns of 51% and 33%.
Smallcaps
Likewise, Nifty Smallcap 50 (54%) and Nifty Smallcap 250 have rallied by 54% and 46%, respectively.
In the Nifty Smallcap 100 index, 18 turned multibaggers with highest returns by Cochin Shipyard (290%) followed by Housing & Urban Development Corporation (HUDCO, 227%),Multi Commodity Exchange (MCX, 200), Tata Investment Corporation (189%). Meanwhile, 15 stocks have given negative returns between 2% (Equitas Small Finance) and 30% (Navine Fluorine).
In the Nifty 50 pack, Bajaj Auto (131%) and Bharat Petroleum Corporation (BPCL, 106%) are multibaggers while 43 stocks have given double-digit returns between 95.35% and 13.22%. HDFC Bank (4.48%), Asian Paints (0.46%), Kotak Mahindra Bank (0.39%), IndusInd Bank (-0.06%), Bajaj Finance (-1.36%) are among the top laggards.
Where to invest?
While Singh of Angel One recommends investors to remain invested in India’s top companies, his advice to investors is to view the Nifty Next 50 index as an investment basket and not apply a pick-and-choose policy. He said that diversification will be a key to reap handsome gains instead of relying too much on any specific index.
However, Sharma of Green Portfolio continues to be bullish on the smallcap space as he said that his investment strategy invloved around picking individual stocks without too much emphasis on the overall index.
Srivastava’s zone of comfort lies with the midcaps, which she said are demonstrating strength after being relatively undervalued for a period.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
