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Top SME companies for investment and book multi-bagger returns

top SME companies for investment

Initial public offering (IPOs) from small and new age companies hitting primary markets such as Paytm, Nykaa, etc. have impacted the investors’ interests and have disappointed them in recent years. However, there was a constant increase in interests of investors in small and medium-sized enterprises’ initial public offerings (SME IPOs). 2022 saw India dominating globally in such IPOs. There are several top SME companies for investment for experienced investors and such investors can book multibagger returns if they remain invested in such stocks for the long-term. SME stocks have performed well historically. Investors need to know the difference between main board IPOs and SME IPOs. 

Primary market or mainboard listing look for rigorous scrutiny and they have stringent and stricter prerequisites in comparison to SME IPOs. For example, companies which are listed here are required to cater to minimum ~1,000 subscribers and they need to maintain post-issue paid-up capital of more than ₹10 crore. In contrast, SMEs are required to only have 50 subscribers (minimum) and their capital needs range from INR1 crore to INR25 crore. If you are looking for some of the top SME companies for investment, this article has come to your rescue as it details some of the companies which are expected to perform well. 

For 2023 calendar year and up until 28th September, India saw ~131 SME IPOs. Out of these IPOs, ~83 IPOs are those who have listed at some gains, ~28 IPOs got listed in losses, while the balance are yet to get listed. Total SME listings by 2023 end should come ~15. In comparison to 2022, this exhibits a ~60% rise in number of SME IPO issuances. As on 20th October 2023, S&P BSE SME IPO index has risen by ~94% over past one year, while S&P BSE SmallCap index grew by only ~32.8%. 

With this in mind, let us now check some of the top SME companies for investment.

1. Sealmatic India Limited

The company designs and manufactures mechanical seals and associated products, which are principally used in oil & gas, refinery, petrochemical, chemical, pharmaceutical, fertiliser, and in several other industrial applications.

Sealmatic India Limited & Al Habshan have joined hands for selling, repairing and refurbishment of Sealmatic mechanical seals in Abu Dhabi. This should help in serving customers in oil and gas, petrochemical, power, water, desalination, and several other process industries. The company recognizes immense potential within this market and it is eager to bring expertise, cutting-edge and tailor-made solutions to UAE. 

In FY23, the company saw its revenue increase by ~40% year-over-year to INR596.17 million, exhibiting that demand for its products remained strong which stemmed from developed markets in Europe, North America and India. 

Buoyant activity in industrial and manufacturing sectors should increase demand for mechanical seals. At the same time, growth in aftermarket sales should act as one of the key factors for supporting demand for mechanical seals. 

Because growth in global and Indian economy should increase and due to impetus especially of Indian Government of infrastructural investment, Sealmatic India Limited expects strong growth in Indian market for mechanical seals. While export growth might be slower because of global slowdown, trade restrictions imposed due to Russo-Ukrainian war led to significant surge in demand for mechanical seals from Russia and other CIS countries which should the company’s revenue moving forward.

2. Bright Outdoor Media Ltd

The company started its operations in 1980 as an outdoor media company. Now, it has been categorised as a leading Out of Home (OOH) media organizations in India, which continues to spread its footprint rapidly throughout India. 

In FY23, the company saw total revenue of INR9,194.47 lakhs for year ended March 31, 2023 against INR5,089.71 lakhs in the prior financial year. It saw PBT of INR961.64 lakhs for the year ended March 31, 2023 against INR357.25 lakhs in FY22. 

India outdoor advertising market should significantly grow in FY24 as a result of growing spending on display advertisements and higher utilization of indoor advertising for the purposes of publicity in end-use industries. The company’s own inventory of hoardings, higher market share, and repetitive customers should support it in exploiting significant growth opportunities.  Huge demand for domestic services and huge industrial presence in both public and private sectors are some of the opportunities which the company sees and targets to capture. 

Indian government offers significant support to advertising industry. The improvement in market sentiments, favourable policies by RBI and opening of newly licensed banks in India continue to open doors to several opportunities for the company. 

3. CFF Fluid Control Ltd

The company was established to give cutting-edge technology and engineering solutions for defence industry in India.

India’s defence and space sectors are at an inflection point and the company is attractively placed to capitalize on such significant opportunity. Optimism is exhibited in profitable growth which was seen in previous financial year. These numbers validate the company’s strong business model and capacity to give significant profit growth for increases in revenue. 

In FY23, the revenue from operations of the company went up by impressive ~50.39% from INR4,698.73 lakhs in FY22 to INR7,066.63 lakhs in FY23. Total income went up from INR 4,712.39 lakhs to INR 7,109.94 lakhs. It saw EBITDA growth of 26.28%, rising from INR 1,882.81 lakhs to INR 1,253.27 lakhs. NPAT of the company saw an increase of ~31.07% from INR 773.32 lakhs to INR 1,013.60 lakhs.

Ministry of Defence continues to show preference for complete systems and solutions, covering capital acquisitions, repair and upgrades which should help the company in achieving above-average growth rates.


While above are some of the top SME companies for investment, there are several other promising SME companies which are expected to perform well in the near future. 

Because of favourable eligibility criteria of post-issue paid-up capital in range of INR 1 – INR 25 crore, top SME companies prefer to enter public markets through IPO and use capital markets for their financing needs. Investors who are looking for top SME companies for investment should focus of the industry in which the company is operating and past performance of the SME company. 

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CEO & Editor
I'm Ved Prakash, Founder & Editor @Newsblare Media, specialised in Business and Finance niches who writes content for reputed publication such as,, Motley Fool Singapore, etc. I'm the contributor of different... news sites that have widened my views on the current happenings in the world.

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