The relentless tariff tantrums of the US President Donald Trump has led to a Great Indian clearance sale in the equity markets and has thrown open the door for conservative investors to create long-term wealth.
The top-100 companies in terms of market capitalisation across sectors are available at a deep discount ranging from 61 per cent to 3 per cent from their 52-week high.
The average fall in value of these top companies was about 25 per cent as of Friday.
Interestingly, the market capitalisation of top-10 companies in the beaten down stock list is worth ₹15.53 lakh crore and it includes three Adani Group companies which are on the way to mend their strained relation in the US.
Adani Green Energy has plunged 61 per cent to ₹838 a share from its 52-week high, while Adani Energy Solutions and Adani Power have dipped 45 per cent and 44 per cent as on Friday.
Last year, Joe Biden-led US Government charged Adani for allegedly bribing over $250 million to Indian officials for bagging solar power contracts. The order passed raised concern over the Group’s fund-raising ability and led to massive downgrade.
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However, the newly-elected Trump Government signed an executive order to pause the bribery charges against the Adani Group bringing back some semblance in these business.
The worry on possible duty-free entry of Elon Musk-owned Tesla in India had crushed automobile stocks with Tata Motors (-45 per cent) and Bajaj Auto (-41 per cent) bearing the brunt. Sending strong signals to pave the way for Tesla’s entry into India, Trump has already criticised India’s high import tariffs on cars.
Swapnil Aggarwal, Director, VSRK Capital, said large caps usually provide superior protection on the downside in turbulent times with their established track record and increased institutional investors interest.
However, he said investors with higher risk tolerance and long-term focused may consider owning a chunk of high-quality small caps with solid fundamentals.
Historically, large-cap stocks are seen as safe havens during periods of market uncertainty and remain the backbone of conservative investment portfolios.
Mohit G Poddaar, Executive Director, Equitree Capital, said the crackdown of large-cap stocks highlight that even the most established companies are not immune to broader market trends and fluctuations.
While the recent market corrections have exposed the vulnerability of even the most reliable large-cap stocks, he added investors can create higher wealth by leveraging the expertise of an experienced fund manager to tap the growth potential of small-cap stocks while effectively managing the associated risks.