Three microcap stocks where FIIs are building their positions
Source: Live Mint
Microcaps are typically seen as high-risk, low liquidity plays that aren’t on the radar of big institutions. But in 2025, the script is flipping.
From under-the-radar companies to surprise multibaggers, here are the microcap gems where FIIs are building their positions in 2025.
These stocks are picked from the Nifty Microcap 250 Index. Dive in to see which ones made the cut.
#1 Astra Microwave Products
Astra Microwave Products designs, develops, and manufactures subsystems for radio frequency and microwave systems used in defence, space, meteorology, and telecommunication.
Its clientele includes Indian government laboratories, Indian defence Public Sector Undertakings (PSUs), Indian Space Research Organisation, and foreign OEMs, Adani Defence, L&T, HAL, and IITM.
The company has five manufacturing units in Hyderabad and a near-field test range unit in Bengaluru.
The company is scaling up in technology and manufacturing, with a diversified portfolio and deep in-house capabilities.
To develop the electro-optics product line, the company plans to expand the origin 21.30 like in the SDR (special drawing rights) product portfolio. It’s bidding for the whole system – the complete radar system – for both DRDO and defence ministry’s future requirements.
The strategic focus on indigenisation, product depth, and new business lines (space, anti-drone, SDR) positions Astra as a key beneficiary of India’s defence and space modernisation.
FIIs increased their holding in this company by about 1.17% in June 2025.
The company is exploring the areas of anti-drone, EW, satellites, SDRs, and electro-optics through joint ventures.
The company has opportunities of around ₹24,000-25,000 crore till FY28 due to the government’s increased budget on defence and other sectors.
As of Q1 FY26, the total order book stands at ₹2,100 crore.
The company expects to maintain profit before tax margin profile around 18% for FY26. It expects to achieve revenue of ₹2000 crore in five to six years.
Coming to the financials, the company’s revenue has grown at a CAGR of 25.4% in the last five years, while its net profit has grown at a CAGR of 65.5%.
The five-year average return on equity (RoE) is 8.6% and return on capital employed (RoCE) is 15.3%.
For FY25, the company reported revenue of ₹1,051 crore(up 15.6%), net profit of ₹154 crore(up 27.3%), with a net profit margin of 14.7%.
#2 Paras Defence and Space Technologies
Paras Defence is a private sector company primarily engaged in the designing, developing, manufacturing, and testing of a variety of defence and space engineering products and solutions.
The company caters to four major segments – Defence & Space Optics, Defence Electronics, Heavy Engineering and Electromagnetic Pulse Protection Solutions.
It’s one of India’s leading players in the defence and space sector. The company has 2 manufacturing units in Navi Mumbai and Ambernath.
Paras has formed a JV with world’s leading exclusive EO/IR company to manufacture world class EO/IR systems in India for various platforms including drones.
The cabinet committee on security has approved launch of 52 spy satellites for ₹27,000 crore to boost space surveillance. Paras is a prominent private sector India company working towards the same.
The company’s clientele includes HAL, ISRO, DRDO, Bharat Electronics, Godrej, TATA Power, Elbit Systems, Controp, Cochin Shipyard, Goa Shipyard, Tonbo Imaging, Singapore Electronics, etc.
FIIs increased their holding in this company by about 1.61% in June 2025.
The company anticipates 20-30% revenue growth in FY26 and aims to be India’s leading anti-drone company and among the top five drone companies by FY27.
Coming to the financials, the company’s revenue has grown at a CAGR of 10.4% in the last five years, while its net profit has grown at a CAGR of 9.6%.
The five-year average return on equity (RoE) is 8.3% and return on capital employed (RoCE) is 13.3%.
For FY25, the company reported revenue of ₹365 crore (up 43.7%), with a net profit margin of 16.7%.
#3 Fiem Industries
It’s engaged in the business manufacturing and supply of auto components like automotive lighting.
The company has a significant market share in automotive lighting & signalling equipment and rearview mirrors for two-wheeler and four-wheeler OEMs.
Fiem operates nine manufacturing units across India in Kundli (Haryana), Hosur (Tamil Nadu), Nalagarh (Himachal Pradesh), Tapukara (Rajasthan), and Ahmedabad (Gujarat). It has a strong client base of 50 plus OEMs, including Honda, TVS, Yamaha, Suzuki, Eicher Royal Enfield, and Hyundai.
The management plans to invest ₹80-100 crore in FY26, in line with a long-term capex guidance of next three years.
As per company officials, there is no impact from China rare earth export ban on the supply chain or EV business at present.
FIIs increased their holding in this company by about 1.69% in June 2025.
The company has guided 15-20% topline growth for next three-five years, citing diversified product and customer mix.
Coming to the financials, the company’s revenue has grown at a CAGR of 11.9% in the last five years, while its net profit has grown at a CAGR of 21.1%.
The five-year average return on equity (RoE) is 16% and return on capital employed (RoCE) is 22.4%.
In FY25, the company reported revenue of ₹2420 crore (up 19.4%), net profit of ₹205 crore (up 23.5%), with a net profit margin of 8.5%.
Conclusion
The accumulation of microcap stocks by foreign institutional investors can potentially be a signal.
Although microcaps come with higher risks — volatility, liquidity constraints, and regulatory sensitivities — they also offer potential opportunities to turn small investments into multibaggers.
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making an investment decision.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated fromEquitymaster.com
