Below is the Quote on Cement Stocks By Mr. Keshav Lahoti- Associate Equity Analyst, Angel Broking Ltd
“Last friday, SEBI in a circular announced a new set of rules for portfolio allocation for multicap funds. According to new rules, it is compulsory for multicap funds to invest at least 25% of their portfolio in each large cap, mid cap and small cap stocks by Jan'21. Currently most of the multi cap funds clearly have large cap bias. Most of the funds used to invest ~70% in large cap, ~15 in midcap and single digit of their portfolio in small cap. Due to these new rules, money will flow from large cap stock to mid cap and small cap stocks.
Today, due to this new rule announced by SEBI, we saw a rally in mid cap and small cap cement stocks. Birla Corp, India Cement, J.K. Cement and JK Lakshmi Cement were up by 12.43%, 7.68%, 7.36% and 4.85% respectively. On the other hand, large cap stocks underperformed such stocks: Ambuja Cements (down 0.64%), UltraTech Cement (up 0.26%), Shree Cements (up 1.47%) and ACC (up 3.47%). Sharp rally was mostly seen in quality mid cap and small cap cement stocks having decent mutual fund holdings, good track record, strong return ratios and visibility of demand in their region.”
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