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Top 5 Smallcap Stocks for 2023

21 Nov 2023

Before you invest in the equity market, it is essential to have a solid investment plan in place. You need to decide on the kind of stocks to invest in, the sectors you wish to invest in, as well as the market cap segment that you intend to add to your portfolio. One such option is the small-cap market segment. 

The Indian financial market has several small-cap shares for interested investors. If you’re not sure what this market segment entails, check out the meaning of small-cap stocks in the section below, before moving on to discover the best shares in this category. 

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What are Small Cap Stocks? 

Small cap stocks are the shares of those companies that have a total market capitalization of less than ₹500 crores. These are typically companies that are in the process of establishing themselves in the market and building a strong presence therein. As a result, the stocks of such companies tend to carry a higher risk than those of more established companies. 

Small cap companies are those who have a market cap of less than Rs 5,000 crore. Although, the history says that returns on small-cap companies have beaten the returns generated by large-cap cos, it has to be noted that investments in small cap carries higher risk and are more volatile.

Advantages-

  • Companies with agility and innovation.
  • A chance to discover hidden gems.
  • Greater returns under favorable conditions.
  • Balancing risk with potential rewards in investments.
  • Conclusion- These top 5 best small-cap stocks for 2023 offer a compelling blend of growth potential and investment opportunities. Keep in mind that investing in small caps compiles of both potential rewards and risks. Stay alert and be informed about market trends to make smart decisions. 

Top 5 Small Cap Stocks to Invest in This Year

Check out some of the best small-cap shares you can consider adding to your stock portfolio this year. 

1. Ujjivan Financial Services

Ujjivan Financial Services is a microfinance company based in India. It was founded in 2004 and is headquartered in Bengaluru. The company now provides financial products and services to under-served and unserved segments of the population, focusing on low-income groups and women. Ujjivan's offerings include microloans, savings accounts, and insurance products. 

As of January 16, 2023, the company’s market price was ₹267. Over the last six months, the share price of Ujjivan Financial Services has risen by nearly 70%, making it one of the best small-cap shares currently available. 

2. Gokaldas Exports

Gokaldas Exports Limited is a leading textile and garment manufacturer and exporter based in India. The company was founded in 1979 and is headquartered in Bengaluru. Today, it is one of the largest exporters of ready-made garments from India, with a strong presence in the US and European markets. The company has a wide range of products, including shirts, trousers, shorts, skirts, and dresses for men, women, and children.

The current market price of Gokaldas Exports as of January 16, 2023, was ₹377, which is a nearly 12% increase over the past six months.

3. Bajaj Consumer Care

Bajaj Consumer Care Limited is an Indian consumer goods company that is engaged in the manufacturing and marketing of personal care and home care products. The company is a part of the Bajaj Group, one of the most diversified and respected conglomerates in India.

The company's product portfolio includes toilet soaps, liquid soaps, hair oils, hair gels, and talcum powders, among others. It also has a strong distribution network across India, with its products being available in most retail outlets and supermarkets. Furthermore, the company’s offerings include several well-known and trusted brands, such as Bajaj Almond Drops Hair Oil, Bajaj Nomarks Cream and Bajaj Brahmi Amla Hair Oil.

With its share price coming in at around ₹173 as of January 16, 2023, the company saw price growth of around 7% over the previous six months. 

4. Delta Corp

Delta Corp Limited is a leading Indian gaming and hospitality company. Founded in 1996 and headquartered in Mumbai, India, the company operates several casinos and offshore gaming vessels, as well as a number of luxury resorts and hotels.

Furthermore, Delta Corp is the only company in India with a pan-India licence to operate live and electronic gaming. It primarily operates in two segments, namely, the casino and the hospitality segments. Delta Corp also has a number of prestigious awards and certifications in recognition of its commitment to quality, customer service, and corporate responsibility. 

As of January 16, 2023, the company’s shares were priced at ₹211, marking an increase of around 20% over the past six months. 

5. Thyrocare Technologies Ltd

Thyrocare Technologies Limited is a leading Indian diagnostics company that provides a wide range of laboratory services for both individuals and organisations. The company was founded in 1996 and is headquartered in Mumbai, India. It now offers a wide range of diagnostic tests and services, including clinical pathology, biochemistry, haematology, and histopathology solutions.

Thyrocare also operates a central laboratory and has a network of collection centres across India. It has even been accredited by several national and international organisations, such as the National Accreditation Board for Testing and Calibration Laboratories (NABL) and the College of American Pathologists (CAP).

The market price of the company’s shares as of January 16, 2023, was ₹566. During the past six months, the shares of Thyrocare Technologies Ltd witnessed tremendous growth, touching the ₹700 mark as well. 

What are the Advantages of Investing in the Best Small Cap Shares?

Investing in small-cap shares gives you many benefits. Some of the top advantages of including the best small-cap shares in your portfolio include the following:

  • Potential for exponential growth
  • Excellent diversification opportunity for your portfolio 
  • Lower pricing and capital requirement
  • Underpriced and often untapped investment opportunities for investors

Conclusion

Now that you know which companies in the small-cap market segment hold the most promise this year, you can chart out an investment plan to buy these assets and make them a part of your portfolio. First, however, to buy stocks in the share market, you need a Demat account and a trading account

In case you do not have one yet, you can always open a Demat account with Motilal Oswal through a simple and easy online process. Once that’s done, you can invest in small-cap shares of your choice and also in stocks across other market caps and sectors, as well as in upcoming IPOs.

 

Related Articles:  What Are Mid Cap Mutual Funds? | What Are Large Cap Mutual Funds

 

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