2 | SMALL CAP 400

I am glad to present sixth edition of Small Cap 400, a comprehensive compendium on Indias top 400 Small Cap companies. Small Cap 400 is one-of-its-kind-book in terms of information about Indias top 400 Small Cap companies compiled in a single book format. This book is designed in a manner so as to help the investors to make informed decision in selecting stock for an ideal portfolio.

The up-to-date information includes all the latest developments in each of the Top 400 ranked Small Cap companies backed by the financial snapshot of last five years. Perceptive insights and future plans for these organizations are gleaned through in-depth interviews with the leaders of these companies giving readers valuable insights about the goings on in the company and industry. These interviews also provide information about the future direction and prospects for these companies. Market data and statistics empower the investors not just about selecting 400 companies but also about the different industrial segments and the economy as a whole.

Small Cap companies present the possibility of greater capital appreciation than other segments though with higher risk. I would suggest every investor should invest at least 20-25 per cent of his investment in only those small cap stocks which have strong fundamentals especially at the time when indexes are at low level. Despite having a risk factor in investment in small cap stocks always bring handsome returns and could proved to be gold mine in long term. We have picked such 400 good investment choices for the readers in this compendium.

Since last year we introduced Gurumantra section which was received well both by readers and corporate leaders. For this years edition I would like to acknowledge the guiding mantra from N M Borah, CMD, Oil India; Satnam

Singh, CMD, PFC and HD Khunteta, CMD, REC which will provide the small cap companies the much valuable advices on practices to adopt for greater success. M Narendra, CMD, Indian Overseas Bank; A S Bhattacharya, CMD, Bank of Maharashtra and A K Anandeswaran, GM (SME), Bank of India have given their suggestions about how sound financial management can make a small company to grow big. Finally I would like to thank Sapan Jain from IBM and Pramodh Mennon from Cisco for their inputs on how new technologies can help smooth operations and better resource management.

Finally, before signing off, I would like to convey my sincere thanks to our marketing team headed by Deepak Jhangiani, Director (Marketing) and his team comprising Jayanand Nayak and Santosh Jha from Mumbai, T V Kumar from Delhi, Sushmita Banarji Mitra from Kolkata, N K Vishwanatha from Bangalore and Jacinth G from Chennai who coordinated proficiently to contour this book in an attractive manner. I also extend my sincere thanks to Huned Contractor for his excellent editing skills and striking captions and Vivek Thakkar for his amusing illustrations. The contribution of Vijay Gawale is appreciated for his cover design and Avinash Rajurkar for his layouts designs which have added value to the content. I hope the readers will find Small Cap 400 interesting as well as informative.

RAVISHANKAR PANDAEditor In-charge

Small In Size Big In PotentialPREFACE

While all efforts are made to ensure that the information published is correct and up-to-date, The company/publisher/editor holds no responsibility for any errors that might occur. All material contained herein is though reliable, are not infallible. The information given in the Book is of an advisory nature. Readers are advised to consult academicians before taking any decision and Publisher holds no responsibility for any losses that may arise due to career decisions made on the basis of information given within the Book

All rights reserved. No reproduction is permitted in whole or part without written consent from the publisher.

Printed and published by Nitin Sawant on behalf of Ramdeo Media Ltd. printed at Indigo Press (I) Pvt. Ltd., Plot No 1 C/716, Off Dadoji Konddeo Cross Road, Retiwala Industrial Estate,Byculla (E), Mumbai 400 027 and Published from 101A, Uttam House, First Floor, 69, P DMello Road, Near Carnac Bridge, Mumbai - 400 009.

Founder & Editor in Chief: V B Padode

Executive Editor: Ravishankar Panda

Project Facilitator: Deepak Jhangiani

Research: Venkat R, Tarun Sharma

Cover Design: Vijay Gawale

Production: J T Sawant

Offices:

Mumbai: Editorial: (022) 40629500, Fax: (022) 40629510

Delhi: Tel: (011) 26169790, Fax: (011) 26106450

Bangalore: (080) 41571980, 41571982

Kolkata: 09231001011

Chennai: 07871424545

Pune: Tel: (020) 40197200, Fax: (020) 40197210

Space Marketing Team

Asst General Manager: Jayanand Nayak (Mumbai)

Senior Manager: Santosh Jha (Mumbai)

Manager: Sabyasachi Das (Mumbai)

Senior Manager: T V Kumar (Delhi)

Senior Manager: N K Vishwanatha (Bangalore)

Asst. Manager: Jacinth G (Chennai)

Senior Manager: Sushmita Banarji Mitra (Kolkata)

REFACE

GURUMANTRA

26

H D KhuntetaCMD, Rural Electrifi cation Corporation

34

N M BorahCMD, Oil India

32

Sujit KanoriaMD, Shrishti Infr astructureDevelopment Corporation

44

ME

NT

OR

Sapan JainCountry Manager, IBM Global Fi-nancing, IBM India/South Asia

46

Pramodh MenonSr VP, Partner Business Group, Cisco

(India and SAARC)

48

ME

NTO

R T

EC

HN

OLO

GY

M NarendraCMD, Indian Overseas Bank

28

A S Bhatt acharyaCMD, Bank of Maharashtra

40

A K AnandeswaranGeneral Manager (SME),

Bank of India

36

ME

NTO

R F

INA

NC

E

Satnam SinghCMD, Power Finance Corporation

INDEX

Preface ................................................... 2

Interview Index ....................................... 6

Legend ................................................... 8

CEO Quotes ........................................... 9

Cover Story .......................................... 19

Methodology ...................................... 286

Master Ranking .................................. 287

Segmentwise Ranking ....................... 290

Editorial Index .................................... 295

Advertisers Index ............................... 298

Feedback Form ................................. 300

FINANCIAL SNAPSHOTS

KNOW YOUR LEADER10

81

CONTENTSONTENTS

16 | SMALL CAP 400

KNOW YOUR LEADER

Last book that I liked Rajnishs book on Silence.

Last bold business move that worked in my favour We entered some of the virgin market where people entered later.

My favourite holiday destination in India and Abroad Pahalgam, Las Vegas.

Th e business leader I admire the most Is Mr. Rahul Bajaj.

As a child I wanted to be Designer in any form of art.

My view on taking the risks Take a risk till a level.

I fi nd inspiration from My projects as well as my competitors.

I take failure as Bad patch of the life that has to be forgotten.

Message for my team Work hard and see how you can prosper.

Ashok ChhajerCMDArihant Superstructures

Paru M JaykrishnaCMDAsahi Songwon Colors

Last book that I liked The Ultimate Gift by Jim Stovall.

Last bold business move that worked in my favour Was to create systems in the company for organised growth.

My team is for me The secret for growth and success.

My favourite holiday destination in India and Abroad Are always those that have mountains with abundant green cover, such as Kashmir and Switzerland.

Th e business leader I admire the most Is Mr. Narayana Murthy.

As a child I wanted to be A doctor to help the needy.

My view on taking the risks Is that they should be calculated ones so that growth is possible without any stress.

I fi nd inspiration from All those leading women who manage their careers and personal lives so beautifully well.

I take failure as A stepping stone for further progress.

Message for my team Is to be eternally optimistic.

28 | SMALL CAP 400

GURUMANTRAURUMANTRA

Taking ConfidentStrides Ahead

What factors have helped the bank register an impressive growth rate which is in fact better than the industry average?

Th e bank witnessed a signifi cant business growth of 35.20 per cent in 2010-11 and as at the end of June 2011 it posted year-on-year growth of 40.49 per cent in business. Th e driving factors of the banks impressive growth include reaching out to the customers through the walk-in-bank campaigns by all the employees at all levels for resource mobilisation and expanding the customer base, improved credit delivery through focused vertical approach viz. large and mid-corporates and SMEs.

What have been the thrust areas for the bank in recent times?

Th e bank plans to add 400 branches across the country to widen its pan-India presence which will go a long way in furthering its business expansion. Also, mobilisation of the current account and saving account (CASA) is the need of the hour to keep the cost of deposits low. Th e bank is focusing on lending to the MSME and the agricultural sectors which are the nations priorities. Th e bank will also look for good credit proposals in the infrastructure and industrial sectors, apart from expanding other retail loans for housing and education.

What are your plans for enhancing your

overseas presence in this financial year?

We are planning to open a branch in Nepal and also proposing to take up with the Monetary Authority of Singapore for granting a qualifying full banks license in order to further exploit the business potential at Singapore. Th e bank has also taken up with the RBI for permission to upgrade its representative offi ces at Guangzhou (China), Al Karama (Dubai) and Ho Chi Minh City (Vietnam) into full-fl edged branches. We have also sought the RBIs permission to open an additional branch in Bangkok at Sukhumvit. Th e bank also plans to set up its third remitt ance centre at Singapore. Meanwhile, our bank, along with Bank of Baroda and Andhra Bank, is actively working towards the commencement of operations of the joint venture subsidiary established at Malaysia.

What are the various SME products that IOB offers?

Th e Indian Overseas Bank off ers a wide range of MSME products and services catering to the need and prosperity of our customers. Our MSME product portfolio has been tailor-made to suit individual and industry requirements as well as to meet the requirement of the SME entrepreneurs comprehensively. Apart from our traditional asset creation loans (term loans) and working

INDIAN OVERSEAS BANK

With its agenda of doing more than what the target states, the Indian Overseas Bank has been crossing the milestones quite easily and is now poised for greater improvements in its financials. Excerpts from the interview with M Narendra, CMD, Indian Overseas Bank:

The bank plans to add

400 branches across the country to

widen its pan-India presence which will go a long way

in furthering its business expansion.

M NarendraCMD

Indian Overseas Bank

29SMALL CAP 400 |

capital management loans (cash credit), the following are our distinct SME products: IOB SME Term Loan. IOB CA for chartered accountants. IOB Sanjeevini for medical

professionals. Scheme for small transport operators

under a tie-up arrangement with Ashok Leyland Ltd, Bajaj Auto Ltd, Tata Motors Ltd, Asia Motors Ltd and TVS Motor Co Ltd.

IOB MSE PLUS a combo product to meet the investment needs and working capital needs of the MSEs through a term loan account in a simplifi ed and hassle-free manner.

IOB MSME Insta Fund to meet genuine unforeseen working capital needs.

Collateral-free loans under CGTMSE. Government-sponsored schemes such

as PMEGP, TUF and CLCSS.

What is your view on the current performance of SMEs and their future?

Th e MSME sector is one of the largest contributors to domestic production and export earnings with its substantial industrial output, employment generation and quality products and services. Th e nation has witnessed the capacity of this sector to boost the countrys economic growth by acting as a supply chain with its innovative products and services to large corporates. However, despite growth and business development, these small players do not have adequate margins to fall back on during diffi cult times. Th e present market scenario indicates that the sector is under stress with rising input and interest costs.

What, according to you, should be the financial management approach for the SMEs to do better?

No business unit can survive even with the best products and exemplary marketing mechanism if its fi nancials are not adequately managed. Most of the small and mid-size business units lack expertise in managing their cash fl ows, capital expenditure planning, negotiating favourable deals with suppliers, balancing quality and costs and

predicting market demand. Apart from the traditional fi nancial management of book-keeping, working capital management and cost control, the business unit must also concentrate on the following areas for eff ective fi nancial management: Composite annual budget and monthly

targets with a monitoring mechanism. Continuous surveillance of areas which

aff ect the liquidity of the business. Capex planning. Cost-saving strategies. Quality control measures.

What measures have you taken to reduce to improve your NPAs considerably? Going forward how are you going to bring this down below 1 per cent?

Th e right selection of borrower with proper credit appraisal, closer monitoring of accounts and periodical guidance will help in maintaining the health of the portfolio. In case of diffi culties, timely restructuring of the credit facilities should be carried out to tide over the units problems. Th is approach will keep the NPAs low and we defi nitely plan to bring our net NPA to below 1 per cent.

What HR practices are being adopted for the improved performance of the employees?

A large number of training programmes are conducted for offi cers and the clerical staff at our staff training college and ten staff training centres. Recently senior offi cers and executives were deputed to national level institutes like the National Institute of Bank Management, College for Agricultural Banking, Management Development Institute, Administrative Staff College of India, etc for specialised trainings. Senior executives were also deputed to overseas training programmes to gain exposure about the latest global developments and international practices.

Promotion at all levels and new recruitment of offi cers and clerks is also taken up to take care of succession planning and support the increased business.

How are you creating value for your investors?

Our bank has a continuous history of dividend payment and its performance during the year 2010-11 has been quite impressive, thereby returning good yields to the investors. Further, we take every eff ort to ensure the wealth maximisation of the banks shareholders by declaring higher dividend coupled with increased book value/earning per share by att aining bett er performance every year.