Dolly Khanna Sells Stakes in Six Companies, Sparking Investor Interest

Dolly Khanna, often called the “Queen of Small Caps,” is highly regarded for her skill in identifying high-potential small-cap stocks early on. Her investment portfolio, managed by her husband Rajiv Khanna, typically focuses on companies in the manufacturing, textile, chemicals, and sugar industries. The recent decision by Khanna to sell stakes in six of her holdings simultaneously has drawn considerable attention from the investment community, leading to questions about her strategy.

Two prominent exits include:

1. **20 Microns Ltd**: This company manufactures industrial micronised minerals and speciality chemicals. Dolly Khanna's stake, which had grown to 1.99%, has now fallen below 1%. The company has demonstrated robust sales and profit growth over the last five fiscal years, with its share price seeing a substantial increase of over 650% since October 2020. It currently trades at a lower Price-to-Earnings (PE) ratio compared to industry medians, and management remains confident about future growth and margin improvements.

2. **Zuari Industries Ltd**: Operating in diverse sectors such as real estate, sugar, and power, Zuari Industries has also seen Khanna's stake drop below 1%. While sales have shown modest growth, the company's net profit history is inconsistent, marked by significant losses in some years, including FY25. Furthermore, the company carries substantial debt, which could be a factor in the exit.

Khanna also divested stakes in Polyplex Corporation Ltd (PET film manufacturing), Rajshree Sugars & Chemicals Ltd (sugar and related products), Sarla Performance Fibers Ltd (textile yarns), and Talbros Automotive Components Ltd (auto components).

The mass sell-off raises important questions: Is this a simple portfolio cleanup, a reaction to unseen market shifts, or an indication of something larger that might be missed by average investors? Investors are advised to monitor these stocks.

**Impact** This news is highly relevant to the Indian stock market, particularly concerning small-cap stocks and the specific sectors these companies belong to. The actions of prominent investors like Dolly Khanna often influence investor sentiment and trading patterns. Rating: 8/10.

**Difficult Terms** * **Small Caps**: Companies with a relatively small market capitalization, often considered to have higher growth potential but also higher risk compared to larger companies. * **Multibaggers**: Stocks that yield returns that are multiples of their initial investment value. * **EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance. * **PE Ratio**: Price-to-Earnings ratio. A valuation metric used to compare a company's share price to its earnings per share. * **FY**: Fiscal Year. A 12-month accounting period used for financial reporting. For example, FY25 typically runs from April 2024 to March 2025. * **Market Cap**: Market Capitalization, the total market value of a company's outstanding shares. * **Revenue Growth**: The increase in a company's sales over a specific period. * **EBITDA Growth**: The increase in a company's operating profit before accounting for interest, taxes, depreciation, and amortization. * **Net Profit**: The final profit a company makes after all expenses, including taxes and interest, have been deducted from its total revenue. * **Industry Median**: The middle value in a set of PE ratios for companies within the same industry, used as a benchmark for valuation.