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The current market crash has made large-caps more attractive investment bets than their smaller counterparts. CNX Nifty’s price-to-earnings multiple on a trailing basis stood at 21.38 times, which is lower than 23.42 times and 22.56 times for the CNX 500 and the CNX Midcap indices, respectively.
Between August 11 and September 2, 17 companies forming part of the Nifty 50, or 34 per cent, touched their 52-week lows. In the CNX 500 and the CNX Midcap indices, 32.4 per cent and 31 per cent touched their 52-week lows. On the same day, five Nifty firms or 10 per cent of the universe, touched their year lows, compared with 4 per cent and 2 per cent in case of latter two, respectively.
The greater fall in the Nifty stocks than its smaller peers could be associated with the inclusion of the large companies in the derivative segment that has been volatile and higher proportion of shares being held by FPIs, which have been on a selling spree.
Comparatively, a large number of firms in the CNX 500 and the CNX Midcap indices do not have a presence in the futures & options segment and are relatively less owned by FPIs. Hence, they have shown greater stability.
At 46 per cent, the CNX Smallcap index has reported the largest proportion of companies hitting their year lows between August 11 and September 2. The index’s multiple stands highest at 99.5 times.
CNX Nifty and S&P BSE Sensex hit their 13-month lows on Wednesday.
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