Up to 75% drop! Should you dump these 30 stocks that destroyed most wealth since last Holi?

While there were many multibaggers since the last Holi, 56 of them to be precise, a few of the stocks also inflicted a lot of pain to investors. As many as 30 names lost nearly 50% or more in the last one year period due to volatility and a broader correction in Indian markets, data from Ace Equity showed.

JaiPrakash Associates, an infra developer which has a portfolio spanning realty, hospitality, power and construction, declined 75% from last Holi --- the highest slump by any company that has a market capitalisation over Rs 1,000 crore.

Spandana Sphoorty Financial, Gensol Engineering, Fusion Finance, Sun Pharma Advanced Research Company, Jai Corp, Dish TV India,

Salasar Techno Engineering, and Sanghvi Movers are some other stocks which also topped the list of negative returns in the past year.


Most of these stocks have a market cap of Rs 5000 crore or below, which means they can be considered part of the smallcap space. Even though the Nifty Smallcap 100 index is up 4% in one year, most of the correction in these stocks could have happened in the last three four months or so.

For instance, the same Nifty Smallcap 100 index is down over 20% on a year-to-date, highlighting the sell-off sentiments prevailing in the Indian stocks, particularly in the broader market. This drop was mainly driven by unsustainable valuations that some of these stocks were carrying after a strong bull run in the last few years.

Gensol Engineering stands out in this losers list for it has dropped 55% in just last 13 days of trading. The company's troubles came following a ratings downgrade by various agencies due to increasing stress levels in servicing debt.

Coming to the outliers, which made investors' wealthy in the last one year period, Ashika Credit Capital is leading the pack with a robust return of 760%. Aayush Art, Indo Thai Securities, V2 Retail, Shaily Engineering are few other stocks which soared multiple hundred times in the reporting period.

Should investors dump these wealth destroyers?

Since, most of the stocks which endured a slump come under the smallcap pack, analysts say it depends on investors' risk appetite towards the broader market in the current scenario. Despite the recent fall, the valuations and volatility levels are not yet attractive for investors to fish in these what most agree on.

Motilal Oswal said India’s markets had their own moves of late with smallcaps taking a hit that felt like a rookie investor’s first bear market.

"With markets behaving like a caffeine-fueled toddler—hyper one day, crashing the next — volatility isn’t done yet. Bottom line? Uncle Scrooge might want to delay that gold pool dive — this mess will take a while to clean up," the brokerage said.

Analysts still prefer largecaps to be relatively easy to invest and make some decent returns over the next at least 12 to 18 months. "Midcaps and smallcaps will be very-very bottoms up and company specific, where the earnings growth will have to be very solid," said Sachin Shah of Emkay Investment Managers.

Data: Ritesh Presswala

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)