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Singhania's SME Bets: Profit or Peril?
22 Oct
Summary
- Abakkus bought IPO anchor shares at lower prices.
- Three SME stocks show varied performance post-investment.
- SME platform rules create unique investment risks.
Sunil Singhania's Abakkus Asset Manager has invested in three companies listed on the BSE SME platform, yielding mixed results. Abakkus secured preferential entry via IPO anchor books for Poojaa Precision Engineering and Maharaja & Speedex India, buying shares at significantly lower prices than public markets. Poojaa Precision has seen a 189% gain, currently valued at 56 times its FY26 profit, though its anchor shares are unlocking soon.
Bai-Kakaji Polymers, acquired through an exchange purchase, has yielded a 44% gain. However, its profitability is influenced by substantial other income. Maharaja & Speedex India, a steel drinkware brand, is trading below its IPO listing price, despite strong sales growth. Its cash conversion is weaker, with significant anchor share unlocks approaching.
Investing in these SME stocks presents specific challenges, including trading in fixed lots, bi-annual financial reporting, lighter governance rules, and thin trading volumes. Retail investors are cautioned that replicating Singhania's success requires understanding the crucial difference in entry prices and navigating the inherent risks of the SME platform.
