List of Top Smallcap Stocks in India on NSE

Stocks are often classified based on their market capitalisation as largecap, midcap, and smallcap stocks. This categorisation helps investors make informed investment decisions. Smallcap stocks with strong fundamentals are often a popular investment choice for those seeking higher returns, as they are stocks of small companies with market capitalisation generally ranging between Rs. 500 cr. and Rs. 5,000 cr. These stocks are different from large-cap stocks as they have a higher potential for growth, which may offer better returns in the long run. In this blog, we will look at what smallcap stocks are, a small cap stocks list of the best small cap stocks in India for 2024, their advantages and risks, and how to invest in them. Identifying fundamentally strong small cap stocks is crucial for investors aiming for substantial gains.

Best Smallcap Stocks in India (2024)

This small-cap stocks list is meant for educational purposes only.

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data in this small cap share list, including the smallcap share price, is dynamic and subject to real-time changes. This data is derived from Tickertape Stock Screener using the following filters:

• Stock Universe: Nifty 500
• Market Cap: Small-cap
• 5Y Average Net Profit Margin: Set the limit to 5 to High (Sorted from highest to lowest)
• 5Y Historical Revenue Growth: Set the limit to 10 to High
• Return on Equity: Set the limit to 10 to High
• 1Y Forward EPS Growth: Set the limit to 10 to High

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

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Smallcap Stocks in India: An Overview

Here are brief overviews of the smallcap stocks listed overview:

Indian Energy Exchange Ltd

Known for its position as India’s premier energy exchange, Indian Energy Exchange Ltd facilitates efficient energy trading, providing a transparent and automated platform. Over the last five years, the company has achieved a revenue growth rate of 13.81% annually, outpacing the industry average of 8.71%. This positions it among the best small cap stocks with strong fundamentals. Its debt-to-equity ratio has remained impressively low at 1.99%, significantly below the industry average of 145.98%.

Aptus Value Housing Finance India Ltd

Aptus Value Housing Finance specialises in affordable housing finance, particularly catering to underserved communities. Over the last five years, it has achieved a remarkable revenue growth rate of 33.16% annually, compared to the industry’s average of 1.6%. This performance makes it a candidate for best small cap stock for long term investment. Its debt-to-equity ratio stands at 118.12%, lower than the industry average of 418.29%, reflecting its focus on sustainable growth.

UTI Asset Management Company Ltd

UTI Asset Management is one of India’s largest and oldest asset management firms, known for its diversified offerings across mutual funds and asset classes. Its net income has grown at an annual rate of 16.76% over the last five years, exceeding the industry’s average growth of 12.29%. Additionally, it maintains a strong current ratio of 159.09%, above the industry average of 156.77%, which underscores its status as one of the best small cap stocks with a focus on growth.

Five-Star Business Finance Ltd

Specialising in small businesses and microloans, Five-Star Business Finance Ltd addresses the needs of underbanked entrepreneurs. Over the last five years, the company has enjoyed a revenue growth rate of 40.37% annually, outpacing the industry’s 15.2% average. It has maintained a debt-to-equity ratio of 111.54%, well below the industry average of 348.68%.

Clean Science and Technology Ltd

Known for its environmentally friendly chemical manufacturing processes, Clean Science and Technology Ltd has established itself as a leader in speciality chemicals. With a revenue growth of 15.53% annually over the past five years, compared to the industry average of 6.09%, it ranks among the top 10 small cap stocks for sustainable growth. Its low debt-to-equity ratio of 0.25% underscores its conservative financial approach, well below the industry’s 31.86%.

CE Info Systems Ltd

CE Info Systems, also known as MapmyIndia, leads in digital mapping and geospatial technology in India. Over the last five years, the company has experienced a revenue growth rate of 20.65% annually, above the industry average of 14.2%. Its impressive growth places it among the best small cap shares. Its debt-to-equity ratio has been maintained at 5.31%, significantly below the industry average of 11.13%.

Computer Age Management Services Ltd

As a prominent player in the Indian mutual fund services industry, CAMS is known for its digital solutions and registry services. With an expected earnings growth of 30.70% for the coming year, it exceeds its three-year CAGR earnings growth of 19.63%. Its strong performance makes it smong the high CAGR small cap stocks. Over the last five years, its debt-to-equity ratio has been a conservative 10.09%, much lower than the industry’s average of 250.55%, making it one of the best small cap stocks to buy for long-term growth.

Indiamart Intermesh Ltd

Indiamart is a leading B2B e-commerce platform in India, connecting buyers and suppliers across diverse industries. The company anticipates a 45.06% earnings growth for the next year, surpassing its three-year CAGR earnings growth of 32.64%. It boasts a net profit margin of 23.73%, demonstrating its strong profitability and positioning it as a top small cap stock to consider.

Aavas Financiers Ltd

Aavas Financiers focuses on providing affordable home loans, particularly in underserved rural and semi-urban areas. Over the last five years, its revenue has grown at an annual rate of 23.23%, compared to the industry average of 1.6%. Its balanced financial management makes it one of the best small-cap stocks for investors seeking growth. However, its debt-to-equity ratio stands at 287.73%, below the industry’s 418.29%, indicating balanced financial management.

Data Patterns (India) Ltd

Known for its cutting-edge electronics solutions, Data Patterns (India) Ltd specialises in the defence and aerospace sectors. It has achieved a remarkable revenue growth rate of 33.69% annually over the last five years, well above the industry average of 8.49%. Its expected earnings growth of 23.25% for next year surpasses the previous three-year CAGR earnings decline of -18.26%, placing it among the best small cap stock for long term investments.

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Investing in Smallcap Stocks via smallcase

One can buy smallcap stocks individually or buy mutual funds or exchange-traded funds (ETFs) that invest in the best small cap stocks in India. You can also easily invest in smallcap smallcase stock lists through professionally managed portfolios. 

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What are Small Cap Stocks in India?

What is a small cap stock? Small cap stocks are stocks of small cap companies. In India, small cap companies have a lower market capitalisation cap of less than Rs. 5,000 crores.

Small cap stocks comprise up-and-coming young companies that are growing fast and are traded both on the BSE and the NSE. The small cap stocks list often includes businesses with small cap share prices that reflect their growth stage and potential. The top small cap companies in India have high growth potential, making them attractive investments for many investors. These small value stocks often present unique opportunities due to their promising nature.

Small cap stocks are tracked by the small caps index, which comprises the best small cap companies in India listed on the National Stock Exchange (NSE) with a market capitalisation between Rs. 500 crores and Rs. 5,000 crores. This index not only includes small cap IT stocks but also represents a wide range of sectors, providing a good representation of the small cap segment of the Indian stock market.

Why Invest in Smallcap Stocks?

Now that we have discussed what are small-cap stocks in India, it’s crucial to understand how we should invest. Investing in the top small cap stocks to buy India presents a distinctive avenue within the financial landscape. These stocks, representing small cap companies in India with smaller market capitalisations, offer unique opportunities and characteristics.

• Growth Potential: The best small cap stocks to buy are known for their potential for rapid growth. These top small cap companies in India often operate in burgeoning industries and can experience significant expansion. This makes small cap stocks for long term investment highly appealing.
• Market Inefficiencies: The small-cap market is less scrutinised than its larger counterparts, creating potential inefficiencies. Investors skilled at identifying undervalued gems within small value stocks may benefit from pricing discrepancies due to the market’s lower visibility.
• Diversification: Including the top small shares to buy in India in a well-rounded portfolio can enhance diversification. Small cap stocks perform differently compared to mid cap stocks in India and large-cap stocks, providing a buffer during market fluctuations. This diversification, especially with small cap IT stocks, adds a new dimension to investment strategies.
• Innovation and Agility: Smaller companies are often more nimble and innovative. Their ability to adapt swiftly to changing market dynamics can result in a competitive edge, fostering resilience and growth. This attribute is particularly notable in small cap IT stocks, which can be at the forefront of technological advancements.

As always, investors must conduct their own research and/or consult their financial advisor before investing.

How to Invest in Smallcap Stocks for Long Term?

Investing in good small cap stocks in India requires thorough research and analysis. The following are steps to consider when investing in the top small cap stocks to buy India:

• Research  NSE high growth small cap stocks by sector and find potential investments. Investors can use tools like the Tickertape Stocks Screener to filter stocks by market capitalisation, identifying promising small cap stocks for long term.
• Analysing financial statements and company performance. Investors should assess the financial health of the list of small cap stocks, such as small cap IT stocks, by reviewing balance sheets, revenue growth, earnings growth, and debt levels.
• Compare with top mid cap stocks to identify diversification opportunities and strategic portfolio additions.

Who Should Invest in Smallcap Shares?

Investors with a high-risk appetite who want to invest in underpriced and under-recognised businesses and earn organically high returns should consider small cap stocks. These investments are appealing because the small cap stocks to buy for long term can yield significant returns, uninfluenced by larger financial institutions. For those looking for strategic opportunities, the smallcap companies list provides a helpful starting point to identify potential candidates. Investors can get quality stocks at a fair price when they invest in small cap shares found in a smallcap company list.

As always, any investor must conduct thorough research and/or consult their financial advisor before investing in all small cap stocks.

How to Identify the Best Smallcap Stocks?

Identifying the top small cap shares requires a nuanced approach that balances risk and potential reward. Here are key considerations to evaluate the best small cap company in India:

Company Fundamentals

Research financial health, revenue growth, and earnings consistency. Look for small cap growth stocks with a solid business model and a competitive edge in their industry. Reviewing the smallcap company list can be beneficial for investors seeking small cap stocks to buy for long term.

Management Team

Assess the leadership’s track record and experience. Competent and visionary management is often a positive indicator for long-term success, particularly in the top small cap stocks in India market.

Market Trends

Analyse industry trends and the company’s position within its market. A small-cap stock with room for growth in a thriving sector may offer promising opportunities.

Financial Ratios

Evaluate key financial ratios such as price-to-earnings (P/E), debt-to-equity (D/E), and return on equity (ROE). These metrics provide insights into a company’s financial health and valuation, helping investors identify top ten small cap stocks with robust fundamentals.

Liquidity

Consider the stock’s liquidity to ensure easy buying and selling. Low liquidity is common among all small cap stocks, which can lead to higher volatility and challenges in executing trades.

Macroeconomic Factors

Be mindful of broader economic conditions. Small stocks to buy for long term can be sensitive to economic shifts, so understanding macro trends is crucial. Identifying top small cap stocks in India in strong sectors can help mitigate risk.

Research and Analysis

Regularly conduct thorough research and stay updated on the company’s performance, industry trends, and any relevant news.

What are the Features of the Best Small Cap Stocks?

When evaluating the top small cap company, there are several key attributes one should keep in mind before investing in the best small cap stock. Some of them have been listed below:

• Highly Volatile: The stocks of these small cap companies in India are volatile since there is uncertainty about them becoming successful in the future. This characteristic is essential when curating a smallcap company list that matches your risk tolerance
• High Returns: Smallcap stocks can potentially typically yield high returns for any investors, especially in the shorter run. This is a significant feature of small cap growth stocks and makes them appealing for those looking at the top ten small cap stocks to enhance their portfolio.
• Low Liquidity: Top small cap stocks to buy India have the least liquidity, making squaring off positions more difficult.

Risks Associated with Small Cap Stocks

Small cap companies in India can offer significant opportunities, but they come with inherent risks. Here are some key risks associated with small cap stocks:

• Higher Risk: Small cap Indian companies are more likely to experience financial difficulties and may have less access to capital than larger companies. This makes investing in the small cap companies list riskier compared to more established firms.
• Limited Liquidity: The best small cap stocks may have limited trading volume, making it difficult to sell shares quickly. This can be particularly true for small company shares that are not frequently traded.
• Greater Volatility: Small stocks to invest in often exhibit greater price fluctuations than large cap stocks. Even new small cap stocks with huge growth potential can be susceptible to sudden market movements.

Advantages of Investing in Smallcap Stocks

• Higher Returns: Indian small cap stocks for 2024 India have the potential to provide higher returns than large cap stocks. The list of small cap companies in India often includes firms that are at the beginning stages of growth, making them appealing for high-return investments.
• Growth Potential: Small cap companies in India have the potential to grow at a faster rate than larger companies.  For those looking to invest, considering the small cap stock list can be a way to find opportunities with promising growth potential.
• Diversification: Investing in the best small cap stocks can provide diversification benefits for a portfolio.

Compared to the small cap best stocks of larger, more established firms, small stocks to buy are riskier and more volatile. Therefore, thorough research is crucial before investing in any smallcap companies list.

Is Smallcap Stock a Good Investment?

Investments in small stocks to buy may be profitable. If an investor buys them at a good price and they have a growth potential that is greater than that of large-cap stocks or blue-chip businesses, they may experience a strong return. Reviewing a list of small cap companies in India helps identify the best opportunities for investment.

Factors to Consider While Investing in Smallcap Stocks

Investing in the best small cap stocks to invest in 2024 can be rewarding, but it comes with inherent risks. Understanding key factors is crucial before diving in:

Risk Tolerance

Small stocks to buy are known for higher volatility. Assess your risk tolerance carefully and align it with the potential fluctuations in these stocks.

Research and Due Diligence

Thoroughly research the best small cap stocks company’s financial health, management, and growth prospects. Even the best small cap stocks for 2024 often lack analyst coverage, especially when evaluating small company shares, making individual research imperative.

Market Conditions

Investing in small shares to buy that are more susceptible to economic shifts. Consider the prevailing market conditions and how they may impact smaller companies.

Liquidity

Due to lower trading volumes, small listed companies in India may face liquidity challenges. Assess the ease of buying or selling shares without significant price impact. Ensure that the smallcap companies list you consider has adequate liquidity for investment purposes.

Long-Term Perspective

Small cap investing may take time to mature. Having a long-term perspective allows you to ride out short-term fluctuations and benefit from potential growth.

Diversification

Avoid concentrating your portfolio on small cap stocks with huge growth potential alone. Diversification spreads risk across different asset classes.

Company Fundamentals

Focus on companies with strong fundamentals. Analyse earnings, debt levels, and competitive positioning of the best small cap share for the long term to gauge stability.

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To Wrap It Up…

Investing in smallcap stocks can be a good way to diversify your portfolio and potentially achieve higher returns. However, it is important to do your research and analysis before investing in any stock, including smallcap stocks.

In conclusion, smallcap stocks are a segment of the Indian stock market that comprises small-cap companies with high growth potential. Investing in smallcap stocks can diversify an investor’s portfolio and potentially increase returns. However, smallcap stocks also carry higher risks, and it is important for investors to conduct thorough research and analysis before investing in them.

Frequently Asked Questions on Smallcap Stocks