Top 10 Small Cap Stocks to Invest in November 2021

Deepshikha | Nov 12, 2021 |

Top 10 Small Cap Stocks to Invest in November 2021

Top 10 Small Cap Stocks to Invest in November 2021

Companies that are neither large-caps nor midcaps are classified as small-caps. Smallcaps have a market value of less than Rs.5,000 crores. This classification can shift as a company’s market value changes. The market value of a company’s outstanding number of shares available is referred to as market capitalization.

Smallcap stocks are those with a market capitalization of $251 million or less, according to market regulator SEBI. According to the SEBI definition, all of these companies are small-cap companies. A benchmark smallcap index is used by both the NSE and the BSE to track the performance of smallcap equities in India. These are the Nifty Smallcap 100 and BSE Smallcap index.

November 2021- Best Small-Cap Stocks to Invest

Every large or mid-cap firm was once a small-cap company, and the only way to graduate and climb up the ladder from small to mid-cap or large-cap is to develop your business and sustain your profitability. In comparison to larger organizations, most small-cap companies have modest sales and less staff.

These businesses, on the other hand, have tremendous potential for growth while also carrying a larger risk. Investors that are more aggressive and risk-tolerant are drawn to small-cap companies in the hopes of achieving high returns.

The following is a list of the best small-cap stocks.

Company NameBSE Scrip CodeNSE SymbolRatingCMP as of
2 November 2021
Industry
Indian Energy Exchange540750IEX5754.00Power Generation/Distribution
VST Industries509966VSTIND53285.30Consumer Goods
Affle India Ltd542752AFFLE55158.5Telecommunication
Bajaj Consumer Care533229BAJAJCON4.5222.00FMCG
Dhanuka Agritech Ltd.507717DHANUKA4750.00Fertilizers & Pesticides
Thyrocare Technologies Ltd539871THYROCARE31141.25Healthcare Services
CARE Ratings534804CARERATING2669.75Financial Services
Justdial Ltd.535648JUSTDIAL2786.60IT
Gulf oil Lubricant Ltd538567GULFOILLUB2589.25Oil & Gas
Heidelberg Cement500292HEIDELBERG1245.30Cement

Factors to consider while investing in Small-cap stocks

Financial Stability

This is a common criterion that investors should consider before investing in a business. Small-cap companies typically have lower sales than large-cap or mid-cap companies. However, if a company’s balance sheet is stable, with good cash flows and little debt, it can survive and outperform its counterparts. So, regardless of the size of the company, it is critical to invest in financially sound businesses with significant growth potential.

Top-Line & Bottom-Line Growth

It’s also crucial to look at how small-cap companies have performed in the past. These businesses should have a good track record for at least the last five years. For example, look at the company’s sales and profit CAGR growth over the last five years and compare it to its peers. This will give you an indication of how that firm has performed in comparison to its competitors. A corporation that regularly increases its sales and earnings eventually gives superior returns to investors.

Market size & Positioning

Small-cap firms are typically single-product or single-service-line businesses. It is critical to understand the overall market size of the business in which a company operates, as well as the company’s presence in that market. This will provide you with a wide perspective on the company’s positioning and market size. A company’s valuation can be significantly influenced by its market niche positioning or some entry hurdles.

Management Quality & Commentary

Every company’s management is crucial in determining the company’s destiny. Before investing in a small-cap firm, it’s a good idea to look at its management history and any previous blunders. As we can see, a lot of small businesses, as well as some larger businesses, are victims of weak corporate governance and financial statement inflation. Avoid companies that are involved in legal or regulatory issues. Smaller organizations are more likely to be swamped by regulatory issues, therefore it’s best to avoid them.

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