7 Great Small Cap Stocks You Should Invest This Year

7 Great Small Cap Stocks You Should Invest This Year

As the broader market prevails to exceed, small cap stocks are getting attention in the market. The “Nifty Smallcap index” has increased by 120% from the last year while the return that has been offered by Nifty is less than 60% during the period. The index for small cap stocks 2021 was functioning for 8 consecutive months without any evacuation in between. Here is a list of the best small cap stocks for 2021 India.

Top 7 Small Cap Stock List, India, 2021

After putting up a dull show in 2018 and 2019, a major comeback of the small cap stocks has been witnessed. Over the last 15 months, The Nifty Smallcap 100 TRI has received 207% and has crossed all the other massive margins. Even the other equity fund segments piled up small cap stocks. Here is the list of the most famous stocks among open-end equity based mutual funds.

1. TCNS Clothing Company Ltd.

TCN Clothing Company Ltd is the leading women’s apparel brand like Wishful, W, Elleven, and Aurelia. It has a market capitalization of approximately 3,400 crores INR. Axis Mutual Fund raised its stake the previous month in this smallcap stock. The company asserted a profit of Rs 12.66 crore in the December quarter after facing losses for 3 consecutive quarters. In the last 1 year, their stock has yielded a return of 44%, under-performing Nifty

2. TV18 Broadcast Ltd.

The shares of TV18 Broadcast Ltd were held by Nippon AMC which was worth Rs 57 crore at the end of May 2021. The media stock has offered a return of 30% in the last 3 months but has yielded a negative return of 23% in the previous 3 years. For the March quarter, TV18 posted a combined total income of Rs 1,369.32 crore. The company asserted a net profit after paying taxes of Rs 236.14 crore in the new quarter.

3. Magma Fincorp Ltd.

Aditya Birla Sunlife AMC chose a fresh stake which was worth Rs 73 crore the previous month in this multi-bagger NBFC stock. In the last 1 year, the price of the stock has increased by 620%. ICICI Securities has a purchase call on Magma Fincorp with a target value of Rs 173. For the March quarter, the company posted a combined total income of Rs 587.14 crore, which is a decrease of 1.46% from the last quarter. But still, this is the top small cap stock to buy.

4. Sundaram Finance Holdings Ltd.

Sundaram Finance Holdings shares have not been able to offer in the last few months. In the last 1 year, the stock has increased by 52%. It is available at a PE multiple of 15X. This smallcap has a market capitalization of nearly Rs 1,100 crore. For the March quarter, the company has posted a combined total income of Rs 18.45 crore, which was an increase of 29.20% from the previous quarter. Sundaram claimed a net profit after paying a tax of Rs 3.82 crore in the last quarter.

5. Solara Active Pharma Science Ltd.

In between Covid-related swings, this smallcap has increased by 175% from the last year. Motilal Oswal has a purchase call on Solara Active Pharma Sciences with a target value of Rs 2,000. Aditya Birla Sun Life AMC selected a fresh stake worth Rs 160 crore in the previous month in this stock. Other mutual fund investors are BOI AXA and Tata AMC.

6. Butterfly Gandhimathi Appliances Ltd.

Butterfly Gandhimathi Appliances has surged the 100 indexes of Nifty Smallcap. The stock has increased by 525% from the last year. For the quarter that ended in March 2021, the company posted a standalone total income of Rs 206.85 crore, which is a decrease of 30.65% from the last quarter. The stock was selected by DSP BlackRock AMC the previous month.

7. E.I.D. Parry (India) Ltd.

Quant Money Managers and Sundaram AMC are two mutual fund houses that have selected this sugar stock. The smallcap has yielded a return of 23% in the last 3 months and almost 80% in the previous 1 year.

Conclusion

There are many investors who often consider investing in small cap stocks as they have historically offered greater annual yields than the mid cap and large cap stocks in the S&P 500 index. Small cap funds are ideal to achieve financial goals for the long term and it would be smart to insert them into your portfolio.

Frequently Asked Questions On Small Cap Stocks

What defines a small cap stock?

Small cap stock meaning: they are companies with a comparatively small market cap. The market cap of a company is the market value of its outstanding shares. The definition for small cap differs, but in general, it implies a company with $300 million to $2 billion in market cap.

Are small cap stocks safe?

Small-cap entities tend to be riskier investments compared to large-cap entities. They have higher potential for growth and tend to provide better returns over the long term, but they do not have the resources of the large-cap companies, which makes them more vulnerable to bearish sentiments and negative events.

Will small-cap stocks do well in 2021?

So far in 2021, small-caps have increased by 14%, fueling the S&P 500's 16% gain. They have kept behind the large-cap index in the present months.
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Yaseer Rashid

Yaseer Rashid got a degree in Journalism and worked as a freelancer. Later he joined News Magnify as a Business and stock writer.

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