Which is the sector where there is, literally, no small-cap company? The answer: PSU banks. In terms of market cap, none of the banks fall in the small-cap category. But yes, there are small PSU banks – those with a smaller loan book size than others. For a majority of the investors and traders, however, a bank whose stock price is below Rs. 50 may appear to be a small-cap – though it is not. So, when looking at banks – or for that matter any stock – make a distinction between the absolute price of the stock and its market cap. Now, the question: Should you buy stocks of PSU banks that have seen relative outperformance in this phase of correction? The question is relevant as the risk of overall market connection is still high.
