VC/PE: Small Cap Stock Ideas!

Venture Capital/Private Equity investors are usually the one who spots the emerging companies and exit with a phenomenal returns.  VC/PE, typically invest in the unlisted companies but there are investments in the listed space as well. I found 4 interesting small cap (<2000crs market cap) companies with Interesting business model and Scalability. What’s more is that these are the only listed companies in their respective segments. They have no listed peers.

Manappuram General Finance & Leasing Ltd (CMP- 651) : Provides loans on gold which is at large an unorganised segment currently. Market cap of Rs 1125crs (it will increase after the merger with its subsidiary), ROE of 30-35%, NIM of 13% and the Highest Credit rated  NBFC. Venture Capital investors hold an aggregate 32% stake in the company.

Shriram City Union Finance (CMP – 394) : It is sort of a micro-finance organization. Small ticket retail loans with shorter tenors operating in the semi-urban and rural areas. Market cap of Rs 1816crs, ROE of 20%, NIM of around 11-12% and a Strong management. Shriram Group is very popular among the VC/PE  investors.

e-Clerx (CMP – 426) : Only listed play on the KPO space. The company derives major portion of its revenues from the financial vertical. It has a market cap of 789crs, ROE and ROCE in excess of 35% and growth will be directly related to the US economy.

Himadri Chemicals (CMP -432) : Manufactures Coal Tar and plans to triple capacity and be counted amongst the top three players globally in 3 years. It has a market cap of Rs 1426crs, ROE of around 20% with a high entry barriers which leads to a certain competitive advantage.

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One response to “VC/PE: Small Cap Stock Ideas!

  1. Prabhakar Kudva

    Deveshji,
    May be you could also add Page Industries to your list.Nalanda Capital has a decent stake in it.

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