By Anichya Shah, CNBC-TV18

Companies with high debt-equity ratio have underperformed the Nifty in the last 30 days.  

Very-leveraged companies that have underperformed the Nifty have been bouncing back strongly. Real estate, banking and metals space had been highly oversold for the last 30 days – the market has been in a fair bit of downtrend over the last couple of months or so – so risk aversion has crept into these stocks, which have been highly-leveraged; their debt-equity ratio has been 2:5 and you have seen a fair bit of selling pressure.  

If one looks at the universal BSE 500 stocks, one sees a debt-equity ratio of greater than 5, sell-off more than 15% off the Nifty underperformance.  Some other examples are:

30 Day Returns Vs Nifty (%)

D/E > 5x                                  -14.7

D/E: 2-5x                                 -13.5  

D/E: 1-2x                                 -8.7

D/E: 0.5-1x                              -8.9

D/E <0.5x                                -5.0

Some stocks with high leverage that have underperformed the Nifty: