Which are the top electric vehicle smallcap stocks in India right now?
As per Equitymaster's Stock Screener, these are the top smallcap stocks riding the electric vehicle megatrend.
These smallcap companies have been ranked as per their Price to Earnings ratio. The electric vehicle revolution has taken the auto sector by storm and the smallcap space especially is ripe for disruption.
However, there are other parameters you should take into account as well before forming a hard opinion on the stock.
What are smallcap stocks?
According to the market regulator, smallcap stocks are companies which rank 251st and beyond in terms of their market capitalisation.
Investing in them is perceived to be risky. However, the potential for higher returns makes them an appealing investment avenue.
What are electric vehicles?
Electric vehicles are vehicles that run on electric power from batteries instead of gasoline or diesel.
They help lower our dependence on fossil fuels, which are the primary source of greenhouse gases that lead to climate change and threaten humanity's future.
How should you go about investing in electric vehicle stocks?
Electric vehicles (EVs) are the next big thing. As the cost and affordability of EVs drops in the coming years, we are not far from when most vehicles will be electric.
There are various ways to invest in the EV opportunity. You can...
- Buy stocks of automobile companies that manufacture electric vehicles.
- Buy stocks of EV component makers such as batteries as the rapid penetration of EVs will drive the need for lithium ion batteries.
- Invest in EV charging infrastructure providers
- Invest in commodities that are widely used in EV battery production such as silver, nickel, copper.
- Invest in electric mobility services and financers.
If you need some more help, you can check out our list of Electric vehicle stocks here.
You can also check out the playlist on electric vehicles on Equitymaster's YouTube channel.
How much should one invest in electric vehicle smallcap stocks?
According to us, in a scenario of ideal allocation of funds, small cap stocks should not comprise more than 10% of one's total equity portfolio.
Further, we believe that a single small cap stock should ideally not form more than 2-3% of the total portfolio.