10 Small-Cap Stocks bought by Mutual Funds in Feb 2021

Introduction

Which top 10 small-cap stocks were bought by the mutual fund companies in February 2021? What is the current total mutual fund holding in these small-cap stocks? Why have mutual funds added these stocks? What are the top-performing small-cap mutual funds?

SEBI has categorised stores into large-cap, mid-cap, and small-cap stocks. As per the market capitalisation, the stocks from 250 onwards are small-cap stocks. The Corporate Governance of these small-cap companies and their FII holding play an essential role in their selection.

Let’s study the recent actions of top small and mid-cap mutual funds:

• Current MF holding means the total investment made by all the mutual fund companies in that company.
• The worth of shares bought means the new total investment done by all the mutual fund companies in that stock in February 2021

Top Ten Small Cap Mutual Funds

Critical Financials of these 10 best small cap mutual funds are here:

1. Chalet hotels ltd.

 Industry: Hotels & Restaurants

Chalet Hotels Limited was incorporated in 1986 and is based in Mumbai, India. Chalet Hotels Limited develops, owns, and manages high-end hotels in India. Its hotel platform comprises five operating hotels, including a co-located serviced residence in Mumbai, Hyderabad, and Bengaluru, representing 2,328 keys under the JW Marriott, Westin, Marriott, Marriott Executive Apartments, Renaissance, and Four Points by Sheraton brands. It is one of the top-performing small-cap mutual funds.

Other business areas- commercial and retail operations and real estate development.

Strengths:

• The company’s portfolio consists of high-end branded hotels, all strategically located in key metro cities of India.
• An active asset management model for the hotels managed by Marriott gives access to the latter’s management expertise, human resources, and operational know-how. Also, due to this agreement, the company does not have to incur any promotional costs on brand promotion.
• The higher occupancy rate(70%) is higher than the industry. Occupancy rate is one of the critical metrics to analyse the hotel industry. Therefore, a higher rate is better.
• Chalet has a backing of a leading real estate developer, K.Raheja group. Therefore benefits from the lower cost of land acquisition and of developing hotels.

Weakness:

• The company is highly indebted, which will be paid from the IPO proceeds. As of December 31, 2018, the total outstanding borrowings were Rs. 2,586.39 crore.
• A high degree of dependence on Marriott for branding and running the hotel operations increases vulnerability.
• The business model is based on acquiring land and further development, which requires significant capital expenditure.
• The already high debt levels may curtail its ability to raise funds and expand plans in the balance sheet.

2. Tube Investments of India Ltd

Industry – Cycles and Accessories

A pioneer in the Cycles market, TI Cycles, formed in 1949, has continuously developed new trends to evolving consumer needs and is one of the best small cap mutual funds. TI Cycles’ vision is “To be the most preferred brand in fitness, recreation & personal mobility solutions.” It strives to give its customers a lifetime experience. TI Cycles have introduced fun and entertaining stores across the length and breadth of India. The company has been proactive and was the first bicycle company to change the cycle retail landscape.

3. KEC International Limited (KEC)

Industry: Transmission towers

It was incorporated as Kamani Engineering Corporation in 1945 by Ramji M Kamani. KEC International, the flagship company in the transmission sector of the RPG Group, is a global leader in the power transmission engineering, procurement, and construction (EPC) business. With global operations spanning over 20 countries, the company is present in India, UAE, Saudi Arabia, Libya, Ghana, Algeria, Afghanistan, Nigeria, Kazakhstan, Mali, Tajikistan, South Africa, Namibia, Mozambique, Ethiopia, and Egypt, among several other countries.

It is one of the world’s largest Power Transmission EPC companies. KEC manufactures transmission towers and erection and laying of power transmission lines on an EPC basis. The company operates as a power transmission engineering, procurement, and construction company worldwide. KEC supplies towers and constructs transmission lines for the power transmission and distribution industry.

4. Kalpataru Power Transmission Ltd

Industry- Transmission Towers

Kalpataru Power Transmission (KPTL), incorporated in 1981, is engaged in designing, testing, fabrication, erection, and construction of transmission lines and substation structures on a turnkey basis across India and overseas. The company was incorporated under HT Power Structures- a private limited company and is  listed amongst top ten small-cap mutual funds . The company is promoted by Kalpataru Group, which holds 67% of the stake. The company is one of the leading Turnkey projects for EHV Transmission Lines, including 800 VK in India and Overseas.

Business area:

Civil Contracting, Power and Distribution Projects, Biomass Power, Oil & Gas Pipelines

5. Balrampur Chini Mills Ltd.

Industry: Sugar

Balrampur Chini Mills (BCML), incorporated in 1975, is one of India’s largest integrated sugar manufacturers. Its business portfolio consists of manufacturing and marketing of sugar, ethyl alcohol, ethanol, generation & selling of power & also manufacturing & marketing of organic manure. The company, in totality, has nine sugar factories situated in Eastern Uttar Pradesh with an average crushing capacity of  73,500 tonnes per day. Its total saleable cogen power capacity is 126 Mega Watts, supplied to Uttar Pradesh Power Corporation. In 2006, BCML acquired Indo-Gulf Industries, a sugar cane crushing capacity of 3000 tonnes crushing per day (TCD) located in Maizapur, Eastern UP. In addition, a new subsidiary was incorporated in 2007 — Balrampur Overseas — in Hong Kong to trade sugar in the international market.

6. NCC Ltd

Industry: Capital Goods

NCC, earlier known as Nagarjuna Construction Company, incorporated in 1990, develops real estate. NCC projects stand on credentials of its work in various sectors such as Housing, Transportation, Power, water, Metals, and Oil and gas. The company was listed in 1992. The year 1995 saw NCC crossing a turnover of Rs. One billion. The Property Division was established in 1996, followed by the Transportation Division in 1998. Subsequently, the Water, Electrical, Power, Irrigation, Metals, Oil & Gas Divisions are found. The GDRs of the Company are listed on the Luxembourg stock exchange. The enormous trust placed by foreign institutional investors is reflected by the US $ 100 million investment as of date by the Blackstone Group of USA. The Company has offices in Muscat (Oman) and Dubai (UAE) and has bagged projects in these countries.

Projects- Building and Housing, Transportation, Power & Electrical, Water & Irrigation

7. Blue Star Ltd

Blue Star is India’s largest central air conditioning company with an annual turnover of Rs 2800 crores, a network of 30 offices, 7 modern manufacturing facilities, over 1800 dealers, and around 2700 employees. Over time, it has established itself as an expert in central air conditioning and commercial refrigeration. They are known for being top-performing small-cap mutual funds in India.

Business of Blue Star-

Electro-Mechanical Projects and Packaged Air Conditioning Systems, Cooling Products, Professional Electronics, and Industrial Systems. The Company offers comprehensive Electrical Contracting and Plumbing & Fire Fighting Services. Blue Star’s other businesses include marketing and maintaining hi-tech professional electronic and industrial products. Blue Star has business alliances with world-renowned technology leaders such as Rheem Mfg Co, USA; Hitachi, Japan; Eaton – Williams, UK; Thales e-Security Ltd., UK; Jeol, Japan many others, to offer superior products and solutions to customers.

8. Carborundum Universal Ltd

Industry- Abrasives

Carborundum Universal, popularly known as CUMI, manufactures coated and bonded abrasives, super refractories, electro minerals, industrial ceramics, and ceramic fibres in India. Incorporated in 1954, the company was formed to collaborate between Murugappa Group, Carborundum Inc, USA, and the Universal Grinding Wheel Co of the UK.

Business- Abrasives, Ceramics, Electro minerals

The company operates its in-house research and development operations and collaborative research with foreign institutions to sustain its position in India and abroad.

9. Symphony Ltd

Industry- domestic appliances

Symphony Comfort Systems Ltd was incorporated on February 5, 1988, as Sanskrut Comfort Systems Ltd. (SCS). The company commenced its operations in February 1988 with the manufacture of air-coolers. Today it is a world leader in evaporative air coolers. It is a joint-stock, publicly held company and is ranked amongst the top-performing small-cap mutual funds. Best of the technology worldwide has been procured and used to design and develop air coolers.

10. Dilip Buildcon Ltd

Industry- Capital goods

Dilip Buildcon Limited was founded in 1988 in Bhopal, India. In India, Dilip Buildcon Limited and its subsidiaries develop infrastructure facilities on an engineering, procurement, and construction (EPC) basis. It operates through two segments, EPC Projects, and Toll Operations.