More than half of BSE 500 stocks trade below their all-time highs

While at a broader level, retail investors are one of the key drivers of this momentum besides foreign investors in the large- mid-and-small caps space, they too, are being selective in their purchases, analysts say.

New-age businesses are doing well as compared to the traditional sectors and the optimism is getting reflected in their stock prices with investors preferring such counters. There is a perception change in the mind of investors. This polarisation will continue.

Of the 263 stocks, stock prices of 125 i.e. 50 per cent below all-time high price, which includes public and private sector banks, including IndusInd Bank, RBL Bank, Bandhan Bank, DCB; refineries / oil & gas players like ONGC, Oil India; infrastructure companies like Dilip Buildcon, IRB Infra, Ashoka Buildcon; public sector metals & mining majors such as NMDC, Coal India, MMTC; media and entertainment companies like Sun TV and Zee Entertainment and several others like Vodafone Idea, DLF, Indiabulls group stocks, BHEL, NBCC and Engineers India.

Some smart investors are accumulating quality midcaps and small-caps from beaten down sectors (discretionary spending like hotels, retail etc) that will benefit post lockdown with a long-term view,” say some experts.

Despite valuation concerns, analysts remain positive on the road ahead for mid-and-small caps and expect them to outperform their large-cap peers in 2021.