A bronze bull statue stands at the entrance to the Bombay Stock Exchange (BSE) building in Mumbai, India, on Monday, May 20, 2019. Indian stocks rallied the most in more than three years and the rupee and sovereign bonds climbed after exit polls signaled Prime Minister Narendra Modi’s ruling coalition is poised to retain power. Photographer: Dhiraj Singh/Bloomberg
MUMBAI: Companies with high levels of debt are the latest beneficiaries of a retail investor-fueled rally in Indian stocks that’s defying the worst economic outlook in four decades.
A custom Bloomberg index of the 30 most leveraged stocks out of India’s top 200 companies has gained 32% since the end of March, compared with a 28% advance in the benchmark S&P BSE Sensex.
A basket of the 30 least leveraged companies -- similarly compiled using debt-to-asset ratios and excluding lenders -- has gained just 18%. That’s a big change from earlier in the year, when pandemic fears put a premium on companies with strong balance sheets and low net debt.
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