The SME portfolio

1. RHP has good enough data to go through for SMEs (I have no knowledge of the industry and I have no healthcare stocks in my PF)

2. Fundamentally looks decent and does constitute value (I feel), although value isn’t equal to stock performance. The mentioned peers in RHP showcase that it is cheaper than others.

3. In RHP again, “management of the company” and “promoters and promoters’ group” section shows all basic information. Age, experience, education, other directorships of promoters and financials of group companies.

I just viewed it when IPO was open and assumed that it could be a good pick since it is reasonably valued. Also, it is posting good results from last 3 Financial Years, hence it appears less window dressed.

Note: SMEs are risky. Promoters may or may not be a positive point but lack of good promoters/ absence of business centric promoters/ promoters with no succession plan can be a big issue in long term. In big market caps, generally some basic level management is often automated to lower managements but in SMEs promoters are everything and if promoters decide to exit or any other reason, the company is done. I primarily invest in SMEs and reached 100% allocation. Now bit by bit I am going towards small/mid-caps and Mutual funds and so exiting SMEs wherever possible.