Microcap stocks were trading weak on Monday with the Nifty Microcap250 index down over 2 percent in intra-day deals as against a 1.4 percent fall in benchmark Nifty.
The Nifty Microcap 250 Index tracks the performance of microcap stocks listed or permitted to trade on NSE. The index includes the top 250 companies beyond the Nifty 500 index constituents, selected based on their average full market capitalization. Even though there isn't a defined m-cap assigned to such funds, most of these stocks have an m-cap of less than ₹1,000 crore.
While the microcap index has given negative returns of nearly 3 percent in the last 1 week, it is up 17 percent in the last 3 months and 12 percent in the last 1 year.
It is important to note that microcap stocks are extremely volatile and risky and not a good bet for risk-averse investors. only a high-risk investor should invest a small weightage of their portfolio in such stocks. One must always contact their financial advisor or broker before making any such purchase.
Among the index, GHCL, DCB Bank, Chemcon Specialty and Tinplate Company have fallen 6-7 percent each while, Tarsons Products, DB Corp, RateGain Travel, GE T&D India, AGI Greenpac, Force Motors, Dish TV and LT Foods had lost over 5.5 percent each.
In the entire index, only Hester Biosciences was trading in the green, up nearly 11 percent.