Porinju Veliyath, the MD and Portfolio manager of Equity Intelligence India reckons that India is still a paradise for micro cap investing. He tweeted, “ 5 #PennyStocks gained 10x in 4 years ($300 Mn to $3000 Mn) India is still a paradise for micro-cap investing. #BeSelective #StockPicking”. Also known as penny stocks, micro-caps constitute those companies whose market capitalisation is less than Rs. 2,000 crores. Micro caps have been in the news for their manifold returns. After meeting all charges in the last financial year, Porinju’s funds had returned more than 46%. Here are the 5 stocks, straight from the distinguished investor. He had tweeted these gems as early as 28th August 2013, nearly 4 years back.
- Balaji Telefilms- the stock was trading at Rs. 35-36 levels in July 2013. Today the stock price is at Rs. 192.5 levels as per NSE. This amounts to a return of more than 500% in less than 4 years! With the new investment received from Reliance Industries, the possibilities for excellent returns in the long term are endless.
- Orient Paper- the stock was trading at Rs. 7.32 as on July 1, 2013 on BSE. The stock has returned more than 12 times in the period, and stands at Rs. 89 today.
- Orient cement- Four years ago the stock had shown volatility by falling by nearly 78% from the levels of 57 to 32-33 levels. The stock was trading at Rs.160 on BSE today afternoon. This has turned out to be another small cap money spinner.
- In late 2013, the price of KRBL was around 23, today the stock is dearer by nearly 20 times, and was trading at Rs. 448 in BSE.
- In September 2013, Mirza International ltd. was trading at Rs. 20-21 levels. The returns have been stupendous with more than 8 times, and was trading at Rs. 170.
As Porinju says, the stocks may be penny, but the businesses are not!