The SME portfolio

For long term holding u need not bother. Keep averaging.

Yep.
On the averaging part, it is tough and you can only average once or twice till that stock becomes the highest allocation.

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Curious - what drives these type of fall in each and every small cap stock?
A few of them is reasonable as fund houses controlling the inflows due to regulatory norms.

Reasons:

  1. The major reason is the immediate run of January wherein all midcap and below Market cap stocks rose exponentially resulting into out of the park fundamentals.
  2. PSU rally not supported by Q3 results.
  3. SEBI-Vmarc crackdown resulting in poor confidence.
  4. ED-Zenith Hawala Scam resulting in cracking of 15-20 stocks
  5. RBI-JM Finance crackdown to stop supporting lending for IPO
  6. General RBI strictness against Loan against Shares (LAS).
  7. Elections (Confirm whom to win yet withdrawals for spending)
  8. Advance Tax (People tend to sell the riskiest and small-mid cap stocks first, rational person would sell NELCO, Tata Tele, Voltas and later TCS and Tata motors even though they are of same group)
  9. SEBI Chairperson Madhabi Puri Buch’s statements on SME and small caps resulted in broader fall.
  10. Geopolitical tension between Russia-West and India-China which pop up every now and then. In rise it is ignored and in fall it just trends.
  11. Ripple Effect of everything started a sell off, normally it falls 2% recovers 1% but the ripple effect caused falling for consecutive days and now everything is on a roll towards the pit of the fall.

There might be other reasons, or the above stated reasons might not actually be resulting the fall.

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I had called up Chaman metallics day before. They are adding almost 3x capacity in comparison to their existing one, which would take approx 1 year to add to the topline.

I have been consistently calling them every 3-4 months as I am quite upbeat on this sector. Surprised that have been able to catch hold of either their CS / CA on the landline itself and they do speak on the business of the company for atleast 20 mint.

A lot of other ‘known’ SMEs dont pick up the call itself

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Nice to hear about promoter responding to the call.
They have mentioned in RHP as well as AR FY 23 about the expansion and happy to hear that they are on track.

Yes, it was quite surprising that they responded to ‘a stranger’ on call and they were not hesitant to respond to tough questions.

This time my objective was to see check that even after the fall they are still responsive to the call

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Well a lot of similarities with my portfolio, bought cosmic quite cheap and sold at 2.5x.
Invested in Shri Balaji Valves after visiting their plant in Pune, though the price at that price was quite high and it has fallen 50% from that price.

But the quality of management, the way they have organized their plant and their professionalism speaks volumes and they have a long way to go in future.

The CFO attended us for 10 min. Due to some other engagement which he had, he told his to CA to have a word with us. I have seen most of the companies that plan to go for IPO creating new conference halls and interiors as a way to ‘show off’. But these guys’ facilities were already in place and the office had good ambience. So perhaps they are giving importance to their white collar associates

I have seen a lot of small companies ignoring their office staff convenience and facilities and that becomes the prime reason for employees to switch. A lot of SMEs just even make containers / makeshift arrangement for office staff and accountants.

Talking of their plant, it was neatly organized. Techinicians were wearing helmet / ear plugs and other safety stuff even though a lot of them were unsupervised.

They have some spare land and plan to utilize it soon and they are going to get some Europian certificates soon. How soon, that we have to keep an eye.
Management was quite upbeat on their numbers and didnt disclose much. I observed a slight smile on them. Hoping that the smile gets converted to numbers!!

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Bulk Deal in Shri Balaji Valve Components Limited on 18-03-2024

RAJESH PANDEY Bought 75,600 shares of Shri Balaji Valve Components Limited @ ₹175.07 per share.

A 20% circuit and a bulk deal.

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Hi sir, Kindly Refer SONU INFRA,

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Hi all, @Dhvanit_Merchant17 thanks for this post.

@Dhvanit_Merchant17 @DocDhiru any new entry have you added recently?

Anyone tracking any new stock(s) in SME that are reasonably valued currently?

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I think Sona machinery is reasonable valued, ipo money goes to new capex if it’s live then I think it’s go New high

@Jitendra_Vyas
Yudiz solution i have added recently.

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Kindly share your rationale behind Yudiz solutions

Yudiz solution

A software company in Gaming industry.
They are planning to start their own gaming platform.
Market cap <100 cr
Zero debt.
Avilable below ipo price.
117 clients across world.

What is the source of this information? Please mention that.

As avilable on website, screener

Anyone here has looked at Greenchef Appliances. It looks cheaply valued compared to Butterfly and StoveKraft…any views will be very welcome

Disc.: invested in GreenChef

valuation may be cheap but in general people go with brand names and there’s too much competition…Even FMEG companies also into home appliances sector so there will always be margin pressure…

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