Amid volatility, fund managers go shopping for these microcap stocks
Despite illiquidity that plagues tiny companies on stock exchanges, especially micro-cap stocks, fund managers often go fishing at the bottom of the barrel. It’s a risky strategy, but if the picks work, they can become multibaggers
Microcap stocks, those with market-capitalisation below Rs 3,000 crore, are high-risk high-return bets. Active fund managers use various parameters while selecting those stocks when equity markets are trading at high valuations and experiencing heightened volatility. Interestingly, microcap stocks have outperformed other indices by a huge margin. So far this year, the Nifty Microcap 250 - TRI has given 8% return, as against Nifty Midcap 150 – TRI that gave 3% and Nifty Smallcap 250 that lost 4%. Here are the top microcap stocks added recently by active mutual fund managers in the last three months. Market capitalisation data shown below is as per mutual fund body AMFI's classification. Portfolio data were as of September 30, 2022. Source: ACEMF.
2/14
Kirloskar Pneumatic Company Schemes that recently added the stock: 15 Sector: Compressors & Pumps M-cap: Rs 2,712 crore A sample of schemes that bought the stock: Franklin India Opportunities, Aditya Birla SL Infrastructure, and Navi Large & Midcap Fund
3/14
Kirloskar Oil Engines Schemes that recently added the stock: 10 Sector: Diesel Engines M-cap: Rs 2,181 crore A sample of schemes that bought the stock: Franklin India Opportunities, and Mahindra Manulife Multi Cap Badhat Yojana
4/14
Mayur Uniquoters Number of schemes that recently added the stock: 7 Sector: Leather and Leather Products M-cap: Rs 1,834 crore A sample of schemes that bought the stock: ICICI Pru Infrastructure, ITI Multi-Cap, and L&T Conservative Hybrid Fund
Butterfly Gandhimathi Appliances Schemes that recently added the stock: 5 Sector: Household Appliances M-cap: Rs 2,343 crore A sample of schemes that bought the stock: Aditya Birla SL India GenNext, and ICICI Pru Multicap Fund
6/14
Pitti Engineering Number of schemes that recently added the stock: 5 Sector: Industrial Equipments M-CAP: Rs 898 crore A sample of schemes that bought the stock of Pitti Engineering: LIC MF Flexi Cap and LIC MF Infra Fund
7/14
Valiant Organics Number of schemes that recently added the stock: 4 Sector: Specialty Chemicals M-CAP: Rs 2,412 crore A sample of schemes that bought the stock of Valiant Organics: Nippon India Small Cap and Navi ELSS Tax Saver Fund
8/14
Ujjivan Small Finance Bank Number of schemes that recently added the stock: 3 Sector: Other Bank M-CAP: Rs 2,997 crore A sample of schemes that bought the stock of Ujjivan Small Finance Bank: Aditya Birla SL Banking & Financial Services and Aditya Birla SL Small Cap Fund
DCB Bank Number of schemes that recently added the stock: 3 Sector: Other Bank M-CAP: Rs 2,483 crore A sample of schemes that bought the stock of DCB Bank: Invesco India Smallcap and ITI Multi-Cap Fund
10/14
Voltamp Transformers Number of schemes that recently added the stock: 3 Sector: Heavy Electrical Equipment M-CAP: Rs 2,069 crore A sample of schemes that bought the stock of Voltamp Transformers: Mahindra Manulife Hybrid Equity Nivesh Yojana and Tata Infrastructure Fund
11/14
Prudent Corporate Advisory Services Number of schemes that recently added the stock: 3 Sector: Financial Products Distributor M-CAP: Rs 2,207 crore A sample of schemes that bought the stock of Prudent Corporate Advisory Services: L&T Hybrid Equity and Sundaram Consumption Fund
12/14
Mrs. Bectors Food Specialities Number of schemes that recently added the stock: 3 Sector: Packaged Foods M-CAP: Rs 1,857 crore A sample of schemes that bought the stock of Mrs. Bectors Food Specialities: SBI Equity Savings and Taurus Tax Shield Fund
13/14
TD Power Systems Number of schemes that recently added the stock: 3 Sector: Heavy Electrical Equipment M-CAP: Rs 1,242 crore A sample of schemes that bought the stock of TD Power Systems: L&T Flexicap and UTI Infrastructure Fund
14/14
Safari Industries (India) Number of schemes that recently added the stock: 3 Sector: Plastic Products M-CAP: Rs 2,055 crore A sample of schemes that bought the stock of Safari Industries (India): Invesco India Smallcap and WOC Mid Cap Fund
