Singhania Sells Small Cap Bets: Abakkus Fund Exits Denta Water, TTK Healthcare

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AuthorVihaan Mehta|Published at:
Singhania Sells Small Cap Bets: Abakkus Fund Exits Denta Water, TTK Healthcare
Overview

Prominent investor Sunil Singhania, founder of Abakkus Funds, has divested stakes in two small-cap companies, Denta Water and TTK Healthcare. These exits by the seasoned investor, known for his conviction, have triggered concern across the investor community regarding the outlook for the small-cap segment. Both companies were reportedly turnaround plays acquired by the fund recently, adding to the intrigue behind the sell-off.

Investor Worry Mounts as Singhania Divests Small-Cap Stakes

Sunil Singhania, the revered founder of Abakkus Funds and a prominent figure in India's investment circles, has made significant sell decisions, divesting holdings in two small-cap entities: Denta Water and Infra Solutions Ltd and TTK Healthcare Ltd. Singhania, often compared to Warren Buffett for his steadfast conviction through market volatility, typically garners significant attention for his investment choices. These surprising exits from recently acquired turnaround candidates have injected unease into investor sentiment concerning the small-cap sector.

Denta Water: Growth Story Stalled?

Denta Water and Infra Solutions, a company focused on water management and infrastructure projects since its 2016 incorporation, recorded impressive financial growth. Sales surged from ₹1 crore in FY20 to ₹203 crore in FY25, achieving a 186% compound annual growth rate. EBITDA transformed from a loss to ₹68 crore in FY25, with net profits turning positive at ₹53 crore after remaining nil until FY20. Despite these strong metrics, Abakkus Fund reduced its stake below the 1% reporting threshold. The share price has seen a 16% drop since its January 2025 listing. The move suggests a potential focus on capital preservation or booking profits, especially following a volatile period linked to a company filing error that saw the stock retract from ₹480 highs.

TTK Healthcare: Stagnant Growth Prompts Exit

TTK Healthcare Ltd, established in 1958 and diversified across pharmaceuticals, consumer products, and medical devices, presented a different financial picture. Its sales exhibited a modest 4% compound growth from ₹646 crore in FY20 to ₹801 crore in FY25. EBITDA saw marginal growth from ₹28 crore to ₹35 crore in the same period. While net profits showed a recovery up to FY23, they dipped sharply, recovering slightly in FY25. For H1FY26, net profits dropped 33% year-on-year to ₹33 crore. Abakkus Funds' decision to trim its stake likely reflects concerns over this stalling growth and a significant 50% drop in H1FY26 EBITDA compared to the previous year, signalling a weakening of the original investment thesis.

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