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Best Smallcap Stocks in India

Smallcap stocks have a lower market capitalisation in comparison to largecap stocks. As per market regulator's categorization, companies which have a market capitalisation below Rs 50 bn are considered as smallcap stocks.

Smallcap companies tend to offer higher growth potential as compared to larger companies, but they also tend to be more volatile.

Historically, smallcap stocks have outperformed during times of economic recovery.

Investors with an appetite to take on some high risk and looking to make multibagger returns may consider investing in undervalued smallcap stocks.

Here are some factors you should consider while investing in smallcap stocks:

  • Earnings Growth - Only companies with long-term growth potential will succeed over time.
  • Investment Horizon - Investing in smallcap companies are usually a long-term bet. Don't expect overnight gains.
  • Risk and volatility - Smallcap companies are usually risky investments as compared to larger/well-known companies and their share price can change dramatically over short periods of time.
  • Returns - Smallcaps can provide higher returns than largecap stocks. However, returns are usually inconsistent.

Take a look at some of the best smallcap stocks to buy.

Alternatively, you can browse through the Equitymaster stock screener to access an exhaustive list of smallcap stocks using a variety of filters like low debt to equity, high growth, high ROE, low PE ratio.

Happy smallcap investing!


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