Future multibaggers in Indian stock market
Finding multibagger stocks in India depends on your research skills. You need to find the stocks that are fundamentally good but are priced very cheap because of some negative news or because of the perception that the company has high debt. You need to find out if the company has products which are, or will be, in high demand. Also, you will need to do some research on the key persons managing the operations. Do a check on their background and find out if they have a history of performing well.
Once you are convinced that a certain stock is fundamentally strong and that it has reached the bottom of its price, start buying and buy as much as you can, truck loads as the saying goes, and then wait for it to multiply. This is one way to become rich, because if the stock you selected multiplies, your fortune shoots up. There is always the risk of the share price going down or even the share being suspended, then you lose your investment. So invest heavily but not so much that if all that investment is lost, it will hurt you too bad. Always have a reserve capital in safe investments like FD and safe Mutual funds.
Investing in penny stocks in India
What is a Penny stock in India? The name Penny Stocks in India comes from the American stock market. A Penny in a Dollar is like a paisa in a Rupee. 100 penny makes a Dollar, and 100 paisa makes a Rupee. In the old days, most American stocks had a face value of one dollar. Shares of companies that were not doing good used to trade for pennies. Thus the name ‘Penny Stock’ became associated with cheap stocks.
I recommend that everyone should invest a portion of their investment money in at least two shares with the aim hitting a multibagger share. You should not invest more than 5 to 10% of your money kept aside for investment. This is a gamble for multibaggers.
Some penny stocks can give very high returns. Most investor Gurus will tell you to stay away from penny stocks. But if you do your research well, you may be able to pick some Multibaggers from penny stocks. If say you choose a penny stock at Rs.2- and it becomes Rs.4, then it is a multi-bagger. Your investment has multiplied by two times. There will always be some stocks in India which are driven down by negative news, even though the fundamentals of the company are good. If you can grab such shares at their lowest price during the fall, and hold onto it for some time, then you could have a multi-bagger in your hand.
My picks of Multibagger Shares in India
I thought I will share with you my experience in trying to hit multibaggers. Below are some of the cheap stocks I bought and still holding, in the hope that it will become multi-baggers. Out of the five shares I invested in the hope of getting multibagger shares, three have gained. One share, V2 Retail has multiplied by almost 25 times. These are the shares I have gambled in:
I bought this share starting at below Rs.3- from about 5 years ago and accumulated a sizable quantity over the years to average around Rs.5.60. Now on 12 March 2021 the price of 3i Infotech is almost Rs.9- and hitting the Upper Circuit +5% daily for the past few days. My prediction is that by the end of March 2021 it should hit Rs.15. I have a feeling that before the end of 2021 it should cross Rs.60 and keep climbing over the years. If it crosses Rs.56-, my investment in 3i would have grown about 10 times in 5 years - Not bad
My reason for buying this share is because I felt that it has some good products like an ERP software called ‘Orion’, Insurance Management software ‘Premia’, Banking solution software called ‘Kastle’ and some other software solutions. I felt that in a few years that this company should do good.
Recent events have proved my guess right. The software products division of 3i was sold for 1000 crores, which in one go wipes out all the debt of the company and leaves a surplus of 200 crores. The price of 3i shares, after the initial knee jerk few days of upper circuit price rise, started falling when people thought that the Software Division was the cash cow in 3i Infotech and if it goes, there would not be any profitable business left with 3i. Those with knowledge of the business of 3i knew that 3i started its operations as an IT service company for ICICI and other banks and that there would be plenty of business remaining which will grow exponentially with the passage of time. Now with the newly appointed expert IT service marketing veteran CEO, 3i Infotech will fly.
Brightcom Group (BCG):
Brightcom group has a very chequered history. The founder and present CEO of the Company Mr. Suresh Reddy is an IIT graduate with an MS from IOWA State University. He started out as a project engineer at Chrysler and then co-founded the Company USAGreetings.com in 1999. USAGreetings later became Ybrant Digital. In 2010 Ybrant bought Lycos which was the most popular search engine before the days of Google. But this acquisition was the downfall of Ybrant with one of its divisions filing for Bankruptcy. In 2018 they lost the legal ownership of Lycos which they hoped would become their shining star. After this debacle, the rest of the divisions of Ybrant Digital changed their name to Brightcom Group.
Brightcom Group or BCG is a leader in the field of AdTech (Advertising Technology) specialising in automated programmatic advertising. This basically means they have software technology to serve targeted advertisements in mobile phones while surfing the net. This is a huge money making field and the competing companies in the same field have their PE ratios in the high double figure whereas BCG is lagging at below or just above 1. BCG makes good profits but their share price is down in the dumps. This is mainly because of the perception that the Company is mismanaged. But I feel that in Mr. Suresh Reddy, the CEO, is a very innovative guy with a proven track record of starting money spinner digital companies. His misfortune was in the acquisition of Companies which went sour - like Lycos - which backfired and landed him in trouble. May be he had to use dubious methods to come out of the s--t hole they got themselves into. Now Brightcom is almost there, ready to take off like the legendary Phoenix rising out of the ashes of its dead predecessor.
I have been investing in BCG for about 5 years now and collected a sizable quantity of BCG shares. My average was below Rs.5-, but recent purchases have pushed up the average price to above 7. In the beginning of March 2021 the price of BCG spurted to above 10 but after a few days backtracked to below Rs.9-. I feel that BCG is just about ready to take off like a rocket and breach the 3 figure mark before the end of 2021.
SUZLON Energy Limited:
Suzlon is a world class Indian wind turbine manufacturer who is ranked as one the world's biggest wind turbine manufacturers and installer of wind farms. In 2018-19 Suzlon was ranked as No.1 in the world having installed 581MW total capacity of wind turbines. World No.2 was Vestas with 492MW and No.3 was Siemens Gamesa with 261MW. Suzlon, which makes us Indians proud, had its difficult times with debts. But recently the debtors of Suzlon got together and granted Suzlon a lifeline by converting some of their debt into equity and also rescheduling debt repayments on easier terms. This has invigorated Suzlon and with the uptick in the world thinking of going green, Suzlon has a bright future.
Suzlon shares in March 2021 is struggling to maintain its price above Rs.5-. I feel that very soon it will break this barrier and enter double figures and keep on growing steadily, because the world is adopting renewable energy at a faster pace than ever before and it is going to stay this way for the foreseeable future. I have invested a sizable amount in Suzlon at an average of just below Rs.5-.
I bought this share at a price of Rs. 12- about four years ago. Now it is down at about Rs.4-, but I am betting that it will go up soon. Opto Circuits is an Indian Company with operations all over the world. Their product line includes internationally approved small medical devices and implants like Stents.
Multibagge Shares which I sold
Here are the shares I had bought previously as my selection of Multibagger shares. I have sold these shares, some at profit others at a loss, but in total I made a good profit over the last few years with my experiment with Multibaggers.
8K Miles Software Services Ltd:
This stock was trading near Rs.1000- at the beginning of 2018, but towards the middle of the year it got into controversies like the Auditor of 8K Miles Media Ltd. resigning and shares of the chief promoter of 8K Miles group being sold. The share dropped to below Rs.100. As usual, I did my research on Companies whose shares hit 52 week lows. I found out that basically 8K Miles Software Services Ltd is a very good Company in the Cloud business and that they have partnerships with Amazon Web Services, Google and Microsoft. I did a lot more research and I was convinced that this Company would get back to its Rs.1000- level share price. So I invested heavily at around Rs.100- per share. Today it is at Rs.159- and climbing. Hope it gets to my target price of Rs.1000-.
Note: The share of 8K miles dropped drastically and I landed in loss and sold all 8K in 2019 with heavy loss
I do not remember when I started buying into Morepen Labs, but it was more than five years ago at a price of under Rs.6-. Now in 2021 it is trading at about Rs.36-. Already a multi-bagger at six times in 2021. But I sold this share sometime 2018-19 when I needed urgent cash and the price was about Rs.25-. I made a reasonably good profit.
The reason I bought this stock was that I was impressed by their product lines. They have USFDA approved manufacturing facilities for some important bulk drugs, and they have a retail line ‘Dr Morepen’ for home self-care medical instruments like BP machines. They also own ‘Burnol’ a famous medicine for burns.
V2 retail shares were purchased by me from around 2014 starting at a price of Rs.12- and averaging at about Rs.20-. I sold all of my shares at an average above Rs.350. I have been fortunate with this share and made good money. V2 retail has a chain of department stores, and they were expanding rapidly then.