In their early stages, small-cap companies often offer substantial growth potential and may be undervalued. Foreign institutional investors are drawn to these companies for the opportunity to achieve high returns as they expand and develop.
An increase in FII stakes enhances the company’s credibility among other investors, potentially leading to a rise in stock prices.
Listed below are three such small-cap stocks in which Foreign Investors have increased their stake up to 28 percent in Q1 FY25
Stratmont Industries Ltd.
Stratmont Industries Ltd. manufactures low ash metallurgical (LAM) coke of various specifications and sizes, customized to meet the requirements of the clients.
FIIs increased their stake from nil in the June quarter, of 2023, to 28.07 percent stake in June 2024. The increase of 28 percent will benefit Stratmont Industries gain attention from other investors.
Investors are drawn to Stratmont for its growth potential, especially in sectors benefiting from infrastructure development and fiscal policies. FIIs are targeting companies with solid fundamentals and growth prospects.
Capacity Expansion
Stratmont Industries Ltd. is planning for backward integration into mining. The company is also planning to forward integration into Steel and Ferroalloys.
Additionally, the company is actively identifying opportunities to achieve its strategic business objectives. Plans are being made to allocate capital expenditures towards these growth initiatives
Financials
Stratmont Industries Ltd. reported revenue for operations in the quarter ending March 2024 of Rs.43.65 crores, up 28 percent from Rs.34.09 crores in Q4 FY23. However, Profit after tax decreased from Rs.0.53 crores to Rs.0.12 crores in the same period.
In Tuesday’s trading session, the company’s share price opened at Rs.61.65 per share, 2 percent up from its previous close.
Ujjivan Small Finance Bank Ltd
Ujjivan Small Finance Bank Limited is an Indian bank focused on serving financially underserved and unserved segments, dedicated to promoting financial inclusion in the country.
FIIs have increased their stake by 20.78 percent from 3.9 percent in the June quarter FY24, to 24.68 percent stake in June FY25. The increased FII stake will reflect a positive outlook on the company’s future performance.
The number of FII/FPI investors in Ujjivan Small Finance Bank increased from 125 to 209 in the same quarter, indicating growing interest among institutional investors. This influx suggests confidence in the bank’s business model and prospects.
Capacity Enhancements
The bank aims to adjust its loan portfolio to a 60:40 ratio of unsecured to secured loans over the next two to three years. Currently, the portfolio consists of 28.5 percent unsecured loans and 71.5 percent secured loans.
Ujjivan SFB is actively expanding its branch network, having recently entered new markets such as Andhra Pradesh
Financials
Ujjivan Small Finance Bank Limited reported revenue for operations in the quarter ending June 2024 of Rs.1,577 crores, up 33 percent from Rs.1,185 crores in Q1 FY24. However, Profit after tax decreased from Rs.310 crores to Rs.301 crores in the same period.
In Tuesday’s trading session, the company’s share price opened at Rs.42.06 per share, 0.3 percent up from its previous close.
Alkosign Limited
Alkosign Ltd manufactures visual presentation systems used in schools and colleges. It manufactures writing boards/display boards/notice boards of different types and their associated accessories.
FIIs have increased their stake from nil in the March quarter FY23, to a 9.73 percent stake in March FY24. The 9.73 percent increase in stake may also indicate that FIIs are strategically positioning themselves in anticipation of future gains.
Aegis Investment Fund PCC, a Mauritius-based investment fund, has bought the 9.73 percent stake in Alkosign Ltd in the year ended March 2024, in exchange for 7,00,000 shares.
Financials
Alkosign Ltd. reported revenue for operations in the quarter ending March 2024 of Rs.14.43 crores, up 28 percent from Rs.12.27 crores in Q4 FY23. However, Profit after tax decreased from Rs.0.18 crores to a net loss of Rs.5.02. crores in the same period.
In Tuesday’s trading session, the company’s share price opened at Rs.146 per share, 1 percent up from its previous close.
Written by – Siddesh S Raskar
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
