Sinking Small Caps

2 replies on “Sinking Small Caps”

This is true only.. your stock market SMEs are still huge by common ppl standards having turnover in 100-500 cr segment.. they are still surviving.. for ppl running small individual businesses with turnover below 5 cr are all out shutting down left right & center.

Due to technology, margins are being compressed across industries, only way to survive is by scaling, which they are not able to do beyond a point. Changes across industries have been too disruptive, ppl not able to adapt. Many industries destroyed by capital dumping by VC.

You look at how zerodha has destroyed broking industry, they have become number 1, but industry revenue pool probably is one fourth of what it was before. Online sellers on ecommerce portals willing to work on wafer thin margins and huge turnovers. Amazon/flipkart/swiggy/ola/uber/oyo/medicine selling sites etc dont even feel the need to make money.. happy losing money.

Govt is squeezing small businesses from all directions. Just to take care of govt compliance cost is 1 lakh plus annually. Manpower cost gone up so much. All of retail industry suffering due to deep discounting and predatory pricing by online.

In future only 2 categories of businesses are going to survive – where its a 1 person show running a small business with low turnover, low cost, making just enuf money for a family to survive. Or grow big enuf to have 50-100+ employees. All small businesses with 5-10 ppl manpower are simply dying out.

Same thing is probably happening at larger scale.

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