Mini Ratna
- Portfolio of Smallcaps with the Potential to Become Future Midcaps & Largecaps
The massive correction in Smallcaps was triggered by corporate governance issues including related party transactions, fraudulent accounting practices and last but not the least over-valuation in smallcap stocks. The Price/Earnings multiple of Smallcap index at the peak in January 2018 was trading at an expensive 114 times. However, the market cap of bottom of the pyramid (i.e 501-1109) Smallcap stocks have corrected by a massive 67% from January 2018 to December 2019. Given the correction, valuations of Smallcap companies are trading at very attractive levels. However not every Smallcap stock will be a winner. Only quality stocks having visionary promoters and following good corporate governance practices will be the winners of tomorrow. Our research team has found these winners in our Mini Ratnas.