Top 5 Small and Midcap Stocks- FPI Favourites

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India has witnessed an inflow of a total of Rs. 2.73 Lakh Crore from Foreign Portfolio Investor in FY21. In this blog, we will be discussing the Top-5 Small And Mid Cap Stocks where FPI has increased their stake in the fiscal year 2021.

Introduction:

India has witnessed an inflow of a total of Rs. 2.73 Lakh Crore from Foreign Portfolio Investor in FY21. Undoubtedly, Large Cap Stocks i.e., Top 100 Companies in terms of Market Capitalization has received the major inflows of FPI in FY21. But there are some small and Mid Cap Stocks where FPI’s have increased their holding significantly in the same period.

Mid Cap Companies are those which are ranked between the Top 100 to Top 250 in the stock exchange according to their market capitalization.

Small-Cap Companies are those which are ranked after Top 250 Companies in Index in terms of Market Capitalization.

Top-5 Small and Midcap companies:

1) Indiamart Intermesh:
  • Indiamart Intermesh is a Mid-Cap Company with a market capitalization of Rs. 24,423 Cr.
  • In FY20, Foreign Portfolio Investors were having around a 12% stake in this company.
  • But now, the FPI holding has increased by 15.41% in FY21, and holdings of FPI in Indiamart are currently at 27.65%.
  • Indiamart is having an asset-light model. Also, good scalability is visible for the company.
  • Indiamart has delivered a return of more than 250% in the last 1 year, while the stock has delivered a return of more than 700% in the last 3 years.
  • The role of Future Discounting is quite high in this stock. The market is expecting high earning visibility in the company.
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2) Dixon Technologies:
  • Dixon Technologies is a Mid-Cap Company with a market capitalization of Rs. 20,482 Cr.
  • In FY20, Foreign Portfolio Investors were holding around 11% stake in this company.
  • But as of March 31, 2021, the Holdings of FPI in the company is 20.57% with an increase of 9.81% in the last 1 year.
  • This stock has also generated returns of more than 400% in the last 1 year.
  • As per the current valuation of Dixon, it looks expensive.
  • The company is having a strong earning as well as growth visibility but the only major concern is the sustainability of the current expensive valuation.
  • Returns generated by the company in Last 1 year and Last 3 year as well is 400%, which means all the return accounts to the performance of last 1 year only. Post this tremendous performance, consolidation can be expected.
3) Affle India:
  • Affle India is a global technology company engaged in the business of providing mobile advertisement services via IT and Software Development.
  • It is a Mid-Cap company with a market capitalization of Rs. 13,769 Cr.
  • As of March 2021, FPIs are holding a 17.28% stake in Affle India.
  • The stake of FPIs has increased by 9.74% between March 2020 and March 2021. FPI’s stake in March 2020 was 7.54%.
  • Affle India utilizes new technology and has adopted an efficient Asset-Light Model.
  • The Biggest Challenge for the company is the presence of big competitors like Google, Facebook, etc. in the Market.
  • Affle India stock has delivered a return of 400% in last 1 year and 600% in last 3 year.
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4) Aavas Financiers:
  • Aavas Financiers is also a Mid-Cap Company with a market capitalization of Rs. 18,273 Cr.
  • FPIs holding in the shareholding of the business was 23.64% in March 2020, which has increased by 8.22% in FY21 and is now at 31.86% as of March 2021.
  • Returns generated by this stock in the last 1 year and last 3 years are around 100% and 180% respectively.
5) GMM Pfaudler:
  • GMM Pfaudler is a small-cap company with a market cap of Rs. 5,973 Cr.
  • This company has witnessed the growth of FPIs holding of 6.70% in last 1 year. FPI was holding a minimal 0.27% stake in the company as of March 2020, but now have they have increased their stake and taken up to 9.97%.
  • One of the reasons behind the increase of FPIs stake in the company can be restructuring.
  • GMM Pfaudler has given returns of 72% in the last 1 year and has provided returns of around 450% in the last 3-years.

Conclusion:

All the stocks are suggested above are not direct recommendations and one should analyze on their own before making any investment. Stocks name given above are screened on the basis where Foreign Portfolio Investors (FPI)/ Foreign Institutional Investors (FIIs) have increased their stake significantly in the last 1-year. Long-Term Investors who are having an aggressive risk profile should research well before taking allocation in any of the above stocks.

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