NATIONWIDE LOCKDOWN AND INDIAN STOCK MARKET

Indian capital market is a market where new shares are issued, existing shares are traded and various other types of financial instruments are dealt. The capital market ensures liquidity to the company and the investors, by providing the facility of exchange of shares and raising capital through IPO. Shares are issued at their face value or premium value and are traded at their market price. The market price of shares implies the market value of the company which depends upon its performance. The increase in the market value of the company increases its market capitalisation. Market capitalisation is the total value of the company which is determined by multiplying the share price with the total number of outstanding shares of the company. In India, market capitalisation of companies decides whether a company is small-cap or mid-cap or large-cap company. At the end of December 2019, an unanticipated disease Coronavirus (Covid19) spread world-wide and following which Prime Minister of India Narendra Modi imposed a nationwide lockdown on 24th march of 2020 in India for 21 days which resulted in disorderly market condition. The study is conducted to investigate the influence of nationwide lockdown on large-cap, mid-cap and small-cap companies. The event study methodology is one of the main techniques used to measure any abnormal return of the stock or index and hence has been applied in the present study. The study has used 41 days event window period and 200 days as estimation period. The results based on the testing of hypothesis shows clearly that the nationwide lockdown and performance of the stock exchange has a strong relation and the impact of the event was different on classified capitalised companies from large-cap to small-cap companies. The event affected the indexes unevenly