Rail Vikas Nigam, IREDA, Delhivery lead midcap hammering, down up to 30%. What next?

Midcap stocks took a heavy beating in February, with the BSE Midcap index plunging 4,500 points (10%), as investors rushed to book profits or cut losses. The pressure intensified in the last week, with the index dropping 4.4% (1,800 points). Out of 132 midcap stocks, 123 ended in the red, while just 9 managed a positive close.

The downturn was fueled by both global and domestic concerns. On the global front, Donald Trump’s threats of reciprocal tariffs and concerns over a US economic slowdown rattled investors. The annualized growth rate in the US dropped to 2.3% in Q4, down from 3.1% in the previous quarter, adding to fears of a slowdown. January’s US inflation print of 3%, exceeding the Federal Reserve’s 2% target, further soured sentiment.

Domestically, midcap earnings disappointed, with 34% of companies missing Q3FY25 estimates, according to JM Financial. Valuation concerns also played a role, prompting widespread corrections.

Biggest losers

• Rail Vikas Nigam (RVNL)
• Tube Investments of India
• Gujarat Gas
• IREDA
• Relaxo Footwears
• Delhivery
• The New India Assurance Company
• Mphasis
• Escorts Kubota
• Deepak Nitrite

These stocks saw declines between 20% and 30%.

On a weekly basis, the steepest falls were recorded in IREDA, New India Assurance, Mphasis, Oil India, and L&T Technology Services, which dropped up to 12%.

Foreign Institutional Investors (FIIs) have been aggressively selling Indian equities, withdrawing ₹34,574 crore in February. On Friday alone, they offloaded ₹11,639 crore, marking the worst single-day sell-off of the month.

Despite support from domestic institutional investors (DIIs), FII activity remained negative for most of the month. In 20 trading sessions, FIIs were net buyers only twice—on February 18 (₹4,786.6 crore) and February 4 (₹809.2 crore).