17 Microcap Stocks Held By Mutual Funds Yet To Unlock Their Potential

Within the portfolios of mutual funds, there exists a cluster of microcap stocks that have yet to realize their full potential. Fund managers maintain their faith in these equities, anticipating promising future outcomes.

Microcap Stocks Shine:

Over the past three years, microcap stocks have exhibited a remarkable performance, outstripping other market segments by a considerable margin. The Nifty Microcap 250 TRI, for instance, witnessed a spectacular surge of 574% from its March 2020 lows.

In comparison, the Nifty 50 TRI, Nifty Midcap 150 TRI, and Nifty Smallcap 250 TRI recorded gains of 176%, 275%, and 321%, respectively, during the same period.

Unpredictable Trajectories:

Although microcap stocks often have the potential to become multi-baggers, not every chosen stock follows the intended trajectory.

Some of these handpicked stocks may underperform and require more time to generate substantial returns. Fund managers, however, maintain their holdings, grounded in the belief that these businesses will eventually thrive.

Here is a selection of microcap stocks held by active mutual funds that have delivered minimal returns over the past year.

Microcap stocks are characterized by a market capitalization of less than Rs 3,000 crore, and the data is current as of August 31, 2023 (Source: ACEMF).

1. CarTrade Tech
   • Held by 5 schemes
   • Sample schemes holding the stock for over a year: Aditya Birla SL Balanced Advantage, HDFC Large and Mid Cap, and ICICI Pru Technology.
2. Thyrocare Technologies
   • Held by 7 schemes
   • Sample schemes holding the stock for over a year: Nippon India Pharma, Nippon India Retirement Fund-Wealth Creation, and Nippon India Small Cap.
3. Greenply Industries
   • Held by 20 schemes
   • Sample schemes holding the stock for over a year: Bandhan Emerging Businesses, Canara Rob Small Cap, and HDFC Mid-Cap Opportunities.
4. Oriental Carbon & Chemicals
   • Held by 6 schemes
   • Sample schemes holding the stock for over a year: HDFC Large and Mid Cap, HDFC Small Cap, and HSBC Small Cap.
5. Matrimony.Com
   • Held by 6 schemes
   • Sample schemes holding the stock for over a year: ICICI Pru ESG, ICICI Pru Smallcap, Tata Digital India, and Tata Retirement Sav Fund – Cons Plan.
6. Mahindra Logistics
   • Held by 13 schemes
   • Sample schemes holding the stock for over a year: Aditya Birla SL Small Cap, Edelweiss Small Cap, and Nippon India Small Cap.
7. Alicon Castalloy
   • Held by 4 schemes
   • Sample schemes holding the stock for over a year: Axis Small Cap and Bandhan Emerging Businesses.
8. Mayur Uniquoters
   • Held by 12 schemes
   • Sample schemes holding the stock for over a year: Bandhan Emerging Businesses, ICICI Pru Dividend Yield Equity, and ITI Small Cap.
9. Astec Lifesciences
   • Held by 8 schemes
   • Sample schemes holding the stock for over a year: ICICI Pru Smallcap, ITI Value, and Nippon India Small Cap.
10. Sagar Cements
    • Held by 7 schemes
    • Sample schemes holding the stock for over a year: Bandhan Emerging Businesses, Bandhan Infrastructure, and HDFC Multi Cap.
11. Indoco Remedies
    • Held by 16 schemes
    • Sample schemes holding the stock for over a year: Franklin India Smaller Cos, ICICI Pru Smallcap, and Nippon India Small Cap.
12. Tamil Nadu Newsprint & Papers
    • Held by 6 schemes
    • Sample schemes holding the stock for over a year: Aditya Birla SL Dividend Yield, Aditya Birla SL Pure Value, and HDFC Hybrid Equity.
13. Butterfly Gandhimathi Appliances
    • Held by 9 schemes
    • Sample schemes holding the stock for over a year: Aditya Birla SL Small Cap, ICICI Pru Multicap, and Sundaram Small Cap.
14. Prataap Snacks
    • Held by 7 schemes
    • Sample schemes holding the stock for over a year: Aditya Birla SL Mfg. Equity, Bandhan Focused Equity, and Kotak Small Cap.
15. Wheels India
    • Held by 6 schemes
    • Sample schemes holding the stock for over a year: Bandhan Emerging Businesses, HDFC Multi Cap, and Nippon India Tax Saver (ELSS).
16. MM Forgings
    • Held by 13 schemes
    • Sample schemes holding the stock for over a year: Franklin India Smaller Cos, HSBC Small Cap, and Tata Small Cap.
17. Subros
    • Held by 9 schemes
    • Sample schemes holding the stock for over a year: Canara Rob Small Cap, DSP Small Cap, Nippon India Small Cap, and UTI Small Cap.