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Understanding the equity market's structural weaknesses

While the benchmark indices have fallen by around 15 percent, there is carnage in the rest of the market 

May 13, 2022 / 10:50 AM IST
Understanding the equity market's structural weaknesses

Rainbow Children's Medicare | CMP: Rs 450 | The stock tumbled over 16 percent on May 10, the first day of listing. The leading multi-specialty paediatric and gynaecology hospital chain operator shares listed at Rs 506, a 6.6% discount over the issue price but extended its loses. The muted listing was on expected lines given its IPO had a tepid response from non-institutional buyers and retail investors, though qualified institutional buyers support was quite strong. The public issue was subscribed 12.43 times during April 27-29.

Markets have fallen by nearly 15 percent from their peak and continue in their downtrend. Foreign investors have sold nearly Rs 3 lakh crore since October 2021 in Indian markets. A large part of the selling has been absorbed by the increased participation of retail investors. While the damage on the benchmark indices is around 15 percent, there is carnage in the underbelly of the market. Certain sectors and individual stocks have taken a much bigger body blow than what the index number reflects. Stocks...

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