32.16 Micro cap stocks

In the Indian share market, Stocks with a market value of less than 5000 crores are called microcap stocks.

How do you select micro-cap stocks?

  1. Is the industry growing at a minimum of 5-6%?
  2. It should have a MOAT.
  3. Are there any red flags, especially promoter red flags?
    1. Why did the IPO come? Is it for OFS?
    2. Promotors reducing stake after IPO?
  4. It should suit your investment style.
    1. Are you a risk taker or a conservative investor?


source: https://youtu.be/Y7DwDjYrmXU

How to identify multi-bagger stocks



  1. It should belong to a high-growth industry in India.
  2. The stock should be going through a short-term problem.
    • Due to this majority of the people do not trust the stock.
    • If a stock has majority shareholders are retail investors, it is usually not a good stock to buy.
  3. Fundamental analysis should be strong.
  4. The risk and reward equations should be favorable.
    • Probability of profit > Probability of losing the entire capital
  5. There should not be any major red flags.


source: https://youtu.be/nICnH4oFRSE

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Thoughts 🤔 by Soumendra Kumar Sahoo is licensed under CC BY 4.0