Best Smallcap Stocks to Buy Today in NSE India (2024) (2024)

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Stocks in the stock market are often classified based on their market capitalisation as largecap, midcap, and smallcap stocks. This categorisation helps investors make informed investment decisions. Smallcap stocks 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. Smallcap 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 share list of the best small cap stocks India for 2024, their advantages and risks, and how to invest in them.

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 from 11th September 2024. 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.

Smallcap Stocks in India: An Overview

Here are brief overviews of the smallcap stocks listed overview:

Indian Energy Exchange Ltd

India Energy Exchange Ltd. (IEX) is India’s first and largest power exchange, holding a market share of over 90% as of September 2023. Established on 26th March 2007 as a public limited company in Maharashtra, IEX began trading in the day-ahead market (DAM) in 2009 and registered its first industrial consumer in 2010. As of 11th September 2024, the company had a market capitalisation of Rs. 19,083.71 cr., and its share price closed at Rs. 211.85. Over the last 5 years., the company’s revenue has grown at a yearly rate of 13.81%, higher than the industry average of 8.71%, and its market share increased from 1.89% to 2.38%.

Central Depository Services (India) Ltd

Central Depository Services Limited (CDSL), established in 1999, aims to provide convenient, reliable, and secure depository services. As a Market Infrastructure Institution (MII), CDSL plays a vital role in the capital market, offering services to exchanges, clearing corporations, depository participants, issuers, and investors. In 2002, CDSL introduced online inter-depository transfers, enhancing the efficiency of the market. As of 11th September 2024, the company had a market capitalisation of Rs. 28,308.01 cr., and its share price closed at Rs. 1,359.30. Over the last 5 years, the company’s revenue has grown at a yearly rate of 29.89%, higher than the industry average of 16.61%, and its market share increased from 6.18% to 19.43%.

Aptus Value Housing Finance India Ltd

Aptus Value Housing Finance India Limited, established on 11th December 2009, provides long-term housing finance tailored to the needs of low and middle-income segments in India. The company also offers loans against properties (LAP) for non-housing purposes. On 31st May 2010, it received its Certificate of Registration from the National Housing Bank (NHB), allowing it to operate as a housing finance provider without accepting public deposits. As of 11th September 2024, the company had a market capitalisation of Rs. 16,103.82 cr., and its share price closed at Rs. 321.60. Over the last 5 years, the company’s revenue has grown at a yearly rate of 33.16%, higher than the industry average of 1.5%, and its market share increased from 0.21% to 2.67%.

Five-Star Business Finance Ltd

Five-Star Business Finance Limited was initially established as a private company under the name ‘Five-Star Business Credits Private Limited’ in Chennai, Tamil Nadu, on 7th May 1984. It became a public limited company and changed its name to ‘Five-Star Business Credits Limited’ on 3rd October 1988. Later, following a special resolution by shareholders at an Extraordinary General Meeting (EGM) on 12th April 2016, the company adopted its current name, ‘Five-Star Business Finance Limited.’ As of 11th September 2024, the company had a market capitalisation of Rs. 21,861.15 cr., and its share price closed at Rs. 742.85. Over the last 5 years, the company’s revenue has grown at a yearly rate of 40.37%, higher than the industry average of 14.53%, and its market share increased from 0.33% to 0.98%.

Clean Science and Technology Ltd

Clean Science and Technology Ltd is a prominent global manufacturer of specialty chemicals. The company produces performance chemicals like MEHQ, BHA, and AP; pharmaceutical intermediates such as Guaiacol and DCC; and FMCG chemicals like 4-MAP and Anisole. As of 11th September 2024, the company had a market capitalisation of Rs. 16,776.66 cr., and its share price closed at Rs. 1,562.60. Over the last 5 years, the company’s revenue has grown at a yearly rate of 15.53%, higher than the industry average of 6.71%, and its market share increased from 0.68% to 0.99%.

Easy Trip Planners Ltd

Easy Trip Planners Limited started as a private company named Easy Trip Planners Private Limited on 4th June 2008 in India. It became a public company on 12th April 2019, adopting its current name. As of 31st March 2023, it stands as India’s second-largest online travel agency, offering a range of travel services and products. As of 11th September 2024, the company had a market capitalisation of Rs. 7,517.00 cr., and its share price closed at Rs. 41.79. Over the last 5 years, the company’s revenue has grown at a yearly rate of 32.15%, higher than the industry average of 5.09%, and its market share increased from 1.36% to 5.41%.

Suven Pharmaceuticals Ltd

Suven Pharmaceuticals Limited (SPL), established on 6th November 2018, is a biopharmaceutical company involved in developing and manufacturing New Chemical Entity (NCE) intermediates, Active Pharmaceutical Ingredients (API), speciality chemicals, and formulated drugs. SPL provides contract research and manufacturing services to pharmaceutical, biotechnology, and chemical companies worldwide. As of 11th September 2024, the company had a market capitalisation of Rs. 30,392.51 cr., and its share price closed at Rs. 1,190.25. Over the last 5 years, the company’s revenue has grown at a yearly rate of 24.09%, higher than the industry average of 9.21%, and its market share increased from 0.17% to 0.3%.

CE Info Systems Ltd

Founded in 1995, C.E. Info Systems Limited is a global leader in digital maps, geospatial software, and location-based IoT technologies. The company played a pivotal role in the development of digital maps in India. As of 11th September 2024, the company had a market capitalisation of Rs. 11,078.99 cr., and its share price closed at Rs. 1,190.25. Over the last 5 years, the company’s revenue has grown at a yearly rate of 20.65%, higher than the industry average of 14.45%, and its market share increased from 0.49% to 0.63%.

Computer Age Management Services Ltd

Computer Age Management Services Ltd (CAMS) is a mutual funds transfer agency that offers a range of services, including investor services, distributor services, and asset management company (AMC) services. As of 11th September 2024, the company had a market capitalisation of Rs. 20,929.58 cr., and its share price closed at Rs. 4,370.60. Over the last 5 years, the company’s debt to equity ratio has been 10.09%, lower than the industry average of 245.87, and its market share increased from 0.75% to 0.89%.

Indiamart Intermesh Ltd

Indiamart Intermesh Limited, established as a public limited company on 13 September 1999, serves as an e-marketplace connecting buyers and suppliers across various product categories and regions in India. As of 11th September 2024, the company had a market capitalisation of Rs. 18,742.93 cr., and its share price closed at Rs. 3,103.00. Furthermore, the company has a net profit margin of 23.73%, and a return on equity (ROE) of 17.6%.

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.

Let’s learn about smallcase.

smallcases are modern investment products that help investors build low-cost, long-term & diversified portfolios with ease. A smallcase is a basket or portfolio of stocks/ETFs representing an idea – an objective, theme, or strategy. They are created and managed by SEBI-registered experts.

Among 500+ smallcases, here’s are some of the top small-cap stocks smallcases:

Mi25 Smallcap smallcase by Weekend Investing

Wright 🌱 Smallcaps smallcase by Wright Research

• Disclosures for Mi25 Smallcap smallcase
• Disclosures for Wright 🌱 Smallcaps smallcase

What are Small cap Stocks in India?

Smallcap stocks are stocks of smallcap companies. In India, smallcap companies have a lower cap of less than Rs. 5,000 crores.

Smallcap stocks comprise up-and-coming young companies that are growing fast and are traded both on the BSE and the NSE. The top small cap companies in India have high growth potential, making them attractive investments for many investors.

Smallcap 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. The index provides a good representation of the smallcap 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 capcompanies in India often operate in burgeoning industries and can experience significant expansion, allowing investors to capitalise on early-stage success.
• Market Inefficiencies: The small-cap market is less scrutinised than its larger counterparts, creating potential inefficiencies. Investors skilled at identifying undervalued gems in this space may benefit from pricing discrepancies that can arise due to lower visibility.
• Diversification: Including the top small shares to buy in India in a well-rounded portfolio can enhance diversification. Their performance is less correlated with large-cap stocks, providing a buffer during market fluctuations.
• 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.

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.
• Analysing financial statements and company performance. Investors should analyse financial statements (such as balance sheets) to determine the financial health of the list of small cap stocks. This can include analysing revenue growth, earnings growth, and debt levels.

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 (these returns are not influenced by larger financial institutions). Investors can get quality stocks at a fair price when they invest in small cap shares.

As always, any investor must conduct thorough research and/or consult their financial advisor before investing.

How to Identify the Best Smallcap Stocks?

Identifying the best small cap stocks requires a nuanced approach that balances risk and potential reward. Here are key considerations:

• Company Fundamentals: Scrutinise financial health, revenue growth, and earnings consistency. Look for companies with a solid business model and a competitive edge in their industry.
• Management Team: Assess the leadership’s track record and experience. Competent and visionary management is often a positive indicator for long-term success.
• 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.
• Liquidity: Consider the stock’s liquidity to ensure easy buying and selling. Low liquidity can lead to higher volatility and challenges in executing trades.
• Macroeconomic Factors: Be mindful of broader economic conditions. Small stocks to buy can be sensitive to economic shifts, so understanding macro trends is crucial.
• 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.
• High Returns: Smallcap stocks can potentially typically yield high returns for any investors, especially in the shorter run.
• 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

• Higher Risk: Small cap Indian companies are more likely to experience financial difficulties and may have less access to capital than larger companies.
• Limited Liquidity: The best small cap stocks may have limited trading volume, making it difficult to sell shares quickly.
• Greater Volatility: Even the small-cap stocks with huge growth potential may experience greater price fluctuations than large cap stocks.

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.
• Growth Potential: Small cap companies in India have the potential to grow at a faster rate than larger companies.
• 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 investors should be extra cautious while conducting their research before making any investment decisions.

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.

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, making individual research imperative.
• Market Conditions: Investing in small share 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.
• 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 in small cap stocks with huge growth potential alone. Diversification spreads risk across different asset classes.
• Company Fundamentals: Focus on companies with strong fundamentals. Analyze earnings, debt levels, and competitive positioning of the best small cap share for long term to gauge stability.

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 higher 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