Top NSE losers: Muthoot Microfin, MCX, AGI Greenpac lead selloff as India-Pakistan tensions escalate

India‘s equity markets witnessed a wave of volatility on May 9, 2025, as rising geopolitical tensions, persistent foreign fund outflows, and policy-linked headwinds triggered a broad selloff across mid- and small-cap stocks. The top 20 losing stocks on the National Stock Exchange revealed deep stress across microfinance, real estate, industrial manufacturing, and tech services, with leading names such as Muthoot Microfin, AGI Greenpac, Grindwell Norton, and MCX facing sharp declines.

This renewed risk aversion was amplified by Operation Sindoor, India’s ongoing military offensive in response to cross-border terror strikes. As hostilities with Pakistan intensified, market participants shifted decisively toward defensives, pulling capital from risk-heavy segments exposed to rural and border-linked sectors.

Why Did Muthoot Microfin Fall Over 12%?

Muthoot Microfin Ltd recorded the steepest fall on the NSE, plunging 12.01% to ₹128.69. The stock opened weak and slid consistently through the session amid growing concerns over asset quality deterioration in the microfinance sector. The company has significant exposure to rural borrowers across states like Uttar Pradesh, Bihar, and parts of Jammu & Kashmir—regions now witnessing economic disruption due to the escalation in India-Pakistan border tensions.

Adding to the pressure, the Reserve Bank of India’s new credit risk guidelines under the Expected Credit Loss (ECL) regime are expected to increase provisioning costs for NBFCs. Analysts noted that the company’s FY24 net interest margins of around 7.3% may compress by at least 100–120 basis points if credit costs continue to rise into Q1FY26.

Investor sentiment has also been dented by rising delinquencies and climate volatility affecting borrower incomes. Brokerages revised the stock to a ‘Hold’, and FII selling was evident in high-volume trade activity crossing ₹18 crore on the day.

What Caused AGI Greenpac’s 10% Drop?

AGI Greenpac Ltd closed at ₹736.15, down 10.48% from its previous close. The decline followed weak guidance on margin compression for FY26, with management citing elevated input costs, including soda ash, fuel, and packaging resin. The company’s Q4FY24 EBITDA margin shrank to 17.1%, and analysts expect further pressure in the absence of pricing power in export markets.

The stock was particularly vulnerable to macro shocks as it caters to packaging for FMCG and liquor industries—both facing demand softness due to rural income stagnation. With the company’s overseas shipments also facing delays, investor confidence has taken a hit.

Brokerages trimmed FY26 EPS forecasts by 8–10%, and the stock was placed on a ‘Reduce’ watchlist due to valuation concerns amid slowing revenue momentum.

How Did Geopolitical Tensions Impact Grindwell Norton?

Grindwell Norton Ltd fell 9.05% to ₹1,611.00, continuing its underperformance amid slowing demand from capital goods and auto clients. As a key abrasives and ceramics supplier, its fortunes are tied to industrial capex, which has remained sluggish. Recent commentary from analysts suggests that the company’s FY24 revenue growth of 4.2% YoY missed expectations, and order books remain subdued.

Amid Operation Sindoor, fund managers are moving away from cyclical industrial plays in favour of high cash-generating businesses. Despite a decent balance sheet, Grindwell is facing valuation derating. Mutual funds have not added fresh positions in the past two quarters, and FII participation has also remained stagnant.

Why Did MCX Share Price Tumble Over 5%?

Multi Commodity Exchange of India Ltd (MCX) closed at ₹5,689.00, down 5.25%, as investors reacted negatively to operational concerns around its platform migration. A brief outage earlier in the week raised questions about the resilience of the newly deployed trading architecture.

In addition, lower futures and options volumes in its flagship gold and energy contracts during early May triggered a selloff. The company reported a strong FY24 net profit of ₹354 crore, but investors are concerned that the transition could hurt top-line growth in Q1FY26.

The sentiment worsened due to broader market risk aversion tied to geopolitical instability. Analysts at ICICI Securities and Motilal Oswal have lowered their price targets by 5–7%, downgrading the stock to ‘Neutral’ citing earnings risk and technical platform uncertainty.

What Dragged Sonata Software and Other Tech Stocks?

Sonata Software Ltd fell 5.91% to ₹369.40, reacting to cautious management guidance and macro weakness in Europe. With over 60% of its revenue derived from the US and UK, the firm is exposed to discretionary IT spending cuts. Q4FY24 saw a decline in EBITDA margins by 80 bps, and the management has warned of further headwinds due to staffing costs and project delays.

This decline comes as investors rotate out of mid-tier IT names with shrinking pipelines. Brokerages cut the stock to ‘Hold’, and FII inflows have reversed over the past week.

Did Regulatory Risk Hit Cholamandalam Holdings?

Cholamandalam Holdings Ltd dropped 5.60% to ₹1,726.50. The NBFC saw aggressive unwinding after analysts flagged the impact of the RBI’s revised provisioning norms under the ECL framework. With high exposure to vehicle loans and semi-urban credit, Chola may face upward pressure on credit costs.

The company had reported a net profit of ₹1,120 crore in FY24 with a healthy capital adequacy ratio, but valuation re-rating is now contingent on maintaining asset quality. Sentiment among institutional investors has turned cautious, and active funds have trimmed their positions.

Why Did Suryoday Bank Fall Again?

Suryoday Small Finance Bank lost 6.53% to ₹114.86, dragged down by concerns over MSME and housing loan stress in rural belts. The lender operates extensively in eastern and central India, including border-adjacent districts now affected by Operation Sindoor’s disruptions.

Brokerage reports indicated that its GNPA ratio could rise from 3.4% to over 4% in Q1FY26 if collections weaken. The bank also faces low CASA deposits, which adds to funding risk.

What Is Driving the Real Estate and Infra Selloff?

Parsvnath Developers Ltd declined 6.51% to ₹19.10 and CEIGALL India Ltd lost 5.38% to ₹248.80 amid tightening liquidity and slow project progress. Both counters suffer from debt overhangs and stretched receivables. Operation Sindoor is expected to delay infrastructure clearance timelines, especially in northern India, creating fresh execution risks.

These companies are now largely ignored by institutional funds, with speculative retail interest being the primary price driver. Analysts advise avoiding these names given poor earnings quality and limited upside catalysts.

How Did Microcap Names Perform?

Several thinly traded names including MT Educare, Paraso Petrochem, HPIL, NGIL, GVPTECH, and Reliable Data Services posted 5–6% declines. These stocks, already under liquidity stress, are now being hit by heightened volatility, stricter circuit filters, and zero institutional interest.

These counters are often driven by retail momentum and remain highly vulnerable to broader market sentiment. With geopolitical headlines dominating news flow, flight to quality remains the theme across fund desks.

Are FIIs and DIIs Still Pulling Out?

Foreign Institutional Investors (FIIs) offloaded ₹2,645 crore on May 9, adding to a three-day sell streak that has now topped ₹6,800 crore. The outflows have primarily come from high-beta sectors such as finance, tech, real estate, and construction.

Domestic Institutional Investors (DIIs) remain net buyers but have shifted their allocations toward large-cap defensives like ITC, Sun Pharma, and HUL. SIP-driven inflows continue but active fund managers are becoming selective, trimming exposure to stocks with warzone risk or earnings uncertainty.

What’s the Outlook for the Indian Market Post Operation Sindoor?

With the escalation of Operation Sindoor and continued air, drone, and missile operations near the western front, markets are now pricing in a geopolitical risk premium. Defence-linked PSUs like Bharat Dynamics, BEL, and HAL are expected to benefit, but the broader market may remain under pressure.

Key market watchers expect:

• Defensive stocks to outperform over the next two quarters

• FY26 budget to include higher capital allocation to defence and internal security

• Midcap and smallcap correction to continue until signs of de-escalation emerge

Analysts also suggest that stocks with robust cash flows, strong corporate governance, and low debt will gain favour, while speculative counters may be further punished.