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Top 12 Micro-Cap Stock Picks by Retirement Mutual Fund

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Published Date: 04 Oct 2024Updated Date: 27 Dec 20246 mins readBy MOFSL

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Introduction

Micro-cap stocks often remain hidden gems in the financial sector. Usually, with a market capitalization of less than ₹500 crores, these smaller companies can offer impressive returns, earning them the label of "multi-baggers." While riskier than high—or mid-cap stocks, the growth potential can vary. Finding the right micro-cap multi-bagger for retirement-focused mutual funds in India requires carefully balancing risk and reward. These funds target long-term returns by identifying micro-cap stocks with solid fundamentals and reliable performance, betting on their future growth in large companies.

Here is an overview of 12 possible micro-cap stocks that have attracted retirement-focused mutual funds in India.

1. Alkyl Amines Chemical Ltd.

Alkyl Amines Chemicals has experienced steady growth over the past decade and is now the top choice among banks seeking full-time employment in the specialty chemicals industry. As a general producer of amines, the company serves the important pharmaceutical, agricultural and water treatment industries. Its strong policy document and expansion plan underscore the prospects for strong growth. Retirement-focused funds as value Alkyl Amines' steady cash flow and commitment to diversify its product offering have positioned it as a potential long-term growth play

2. Deepak Nitrite Ltd.,

Pharmacies, medicine, and petrochemicals are just a few of the products that make Deepak Nitrite stand out in the pharmaceutical sector- thanks to its remarkable growth. In its retirement-focused mutual funds, the corporation places a strong emphasis on innovation, sustainable practices, and vertical integration. Deepak Nitrite is an excellent candidate for long-term investment since it has a robust circular footprint, ambitions for product expansion, and a favorable growth trajectory.

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3. The Opal RG Ltd.,

Over the years, La Opala RG, a well-known brand in the glassware sector in India, has subtly become a ‘Multibagger Stocks.’ Recognized for its supremacy in the Opal glass industry, the business has progressively increased its share of the market. La Opala RG is an appealing option for retirement funds looking for stability because of its great brand, excellent liquidity, and affordable prices.

4. Bajaj Consumer Care Ltd.

A leader in the hair oil segment, highlights its growth potential with its flagship product, Bajaj Almond Drops. The company is taking advantage of the growth in the FMCG sector and expanding into new categories such as skincare. Bajaj Consumer Care's strong brand and extensive distribution network positions it as a strong investment proposition for funds focused on long-term wealth creation. Its efforts to penetrate rural markets for innovation have led to significant growth.

5. VST Tillers Tractors Ltd.

VST Tillers Tractors specializes in agricultural machinery, focusing on small tractors and tillers for smallholder farmers. The company’s innovation and expansion into international markets made it an attractive option for mutual funds that cater to retired investors. India's agriculture industry is vital, and VST Tillers is a good option for investors looking for sustained success because of its robust product lines and expansion strategies.

6. Avanti Feeds Ltd.,

Avanti Feeds has established itself as an important player in aquaculture, especially in shrimp feed production. Benefitting from India’s seafood export industry and strong global networks, large-cap pension funds prefer it due to its dominant position in the shrimp feed market, revenue growth, profit spread and world all due to the growing demand for seafood.

7. Borosil Renewables Ltd.

Borosil Renewables is a leader in solar glass manufacturing and benefits from the increasing use of renewable energy in India. The company’s expertise in low-metal sunglasses aligns with the Government of India’s push for solar power. The mutual funding focuses on Borosil’s sustainability. It is drawn to its vital role in India’s green energy transition, making it a potential hub in energy, and they are made in a new way.

8. Orient Refractories Ltd.

Orient Refractories supplies essential components to the steel, cement and non-ferrous metals industries. Its consistent performance and strong liquidity made it ideal for bank consolidation. With rapid infrastructure and industrialization in India, Orient Refractories is well positioned to capitalize on the increased demand for its products, providing long-term returns for the economy traitors.

9. HEG LTD.

HEG Ltd is a global leader in the manufacture of graphite electrodes, which are critical for steelmaking. The company's success has coincided with the worldwide growth of the steel industry, and its market dominance in graphite and electrolytes gives it high returns. Mutual funds focused on long-term wealth creation appreciate HEG's strong balance sheets, cash flow and leadership in its niche industries.

10. NGL Fine-Chem Ltd.

NGL Fine-Chem manufactures chemicals for human and animal health. Their expertise in pharmaceuticals and pharmaceutical ingredients (APIs) established them as a strong player in this market. As India continues to be a major hub for API manufacturing, banks aiming for long-term growth are betting on the continued expansion and diversification of NGL Fine Chem for higher returns in the future.

11. Kirloskar Oil Engines Ltd.

Kirloskar Oil Engines is a leading player in the Indian engine industry, which is growing in power generation and renewable energy solutions. The company has a strong brand, innovative products and an expanding global footprint for retirement-focused funds, making it an attractive choice Kirloskar Oil Engines offers tremendous growth with stable dividend payouts and market share.

12. Thangamayil Jewellery Ltd.

Thangamayil Jewellery has created a niche in the South Indian gold jewellery market. Despite being a regional player, its growth has been driven by a revamp of market trends by focusing on middle-class consumers. With gold being a popular currency in India, especially in the south, Thangamayil’s consistently high prices and retail presence make it attractive to banks looking for long-term stable returns.

Conclusion

Buying a micro-cap stock comes with a lot of risk, but there is also a lot of possible potential reward. Retirement-focused mutual funds in India aim to find micro-cap stocks that have strong fundamentals, exhibit growth potential and have viable business models. These 12 micro-cap multibaggers showcased here are long-term. Their strong performance, strong market position and scalability make them attractive options for banks looking to maximize returns, although their modest size can cause short-term volatility. Do consult your financial experts for further information.