Investors Bet on Defence & Railways: High Stakes in SME Stocks

Mukul Agrawal, an early investor in small companies, has taken a stake in Apsis Aerocom, a Bengaluru-based firm specializing in precision parts for the aerospace and defence sectors. Since its listing on the NSE SME platform in March 2026, the company's shares have seen a remarkable fivefold increase. Agrawal acquired a 1.21% stake for approximately Rs 9.2 crore. Apsis Aerocom, incorporated in 2022, primarily serves foreign and domestic defence programs, with defence work contributing about 65% of its FY26 revenue. Management has ambitious growth targets, aiming for Rs 500 crore in annual sales by 2031.

In a contrasting move, Ashish Kacholia has raised his stake in Concord Control Systems, a supplier of safety and control electronics to Indian Railways, including its advanced Kavach train protection system. Despite Concord's stock trading approximately 20% below its June peak, Kacholia increased his holding from 1.18% to 1.64% between March and September 2026. Agrawal also holds a significant stake in Concord, though he slightly reduced his position in the same period. Concord boasts a substantial order book of Rs 697 crore, representing about 3.3 times its annual revenue.

Both Apsis Aerocom and Concord Control Systems are listed on SME platforms, which entail fixed lot trading, semi-annual financial results, and relaxed governance rules compared to main boards. This environment can lead to thin liquidity, posing risks for sellers. Apsis Aerocom trades at a high Price-to-Earnings (PE) ratio of around 100x, while Concord Control Systems trades at approximately 61 times its FY26 earnings, both above their respective industry medians. Concord is seeking a transition to the main BSE and NSE boards, which could improve liquidity and attract a wider investor base.