India’s next wave of multibagger stocks will emerge from companies that formalize and digitize the country’s vast informal economy, according to Manish Chokani, Director of Enam Holdings. Speaking at a recent investment summit in Mumbai, Chokani emphasized that the stock market’s future winners will not be limited to traditional blue-chip firms, but will increasingly come from mid-sized businesses that organize fragmented sectors such as retail, logistics, construction, and MSMEs.
“India’s stock market is no longer about a few large firms. Hundreds of profitable mid-sized companies are now creating long-term value by formalizing informal markets and taking share from state-run enterprises,” Chokani said, highlighting a structural shift in India’s investment landscape.
📈 Informal Economy: The Next Investment Frontier
India’s informal economy—estimated to account for nearly 45% of GDP and 80% of employment—has long been underrepresented in capital markets. However, with rising digital penetration, GST compliance, and fintech adoption, many of these sectors are now entering the formal fold.
| Sector | Informal Share (2023) | Formalization Trend | Investment Potential |
|---|---|---|---|
| Retail | 88% | Rapid digitization | High |
| Logistics | 72% | Tech-driven platforms | High |
| Construction | 65% | Labour formalization | Moderate |
| MSMEs | 90% | Credit access rising | Very High |
| Agriculture | 85% | Agri-tech expansion | Moderate |
Chokani believes that companies enabling this transition—through digital infrastructure, supply chain integration, or financial inclusion—will deliver multibagger returns over the next 5–10 years.
🧠 Key Drivers of Formalization
- Digital Payments: UPI and e-commerce platforms are bringing small retailers online.
- GST and E-Invoicing: Compliance is pushing businesses to register and report.
- Fintech Lending: NBFCs and neo-banks are offering credit to previously unbanked MSMEs.
- ESG and Governance: Investors are rewarding companies with transparent operations.
🧾 Multibagger Potential: Sectoral Outlook
| Sector | Example Companies (Listed/Unlisted) | Growth Catalyst | Risk Factors |
|---|---|---|---|
| Retail | V-Mart, Avenue Supermarts | Tier-2/3 expansion | Margin pressure |
| Logistics | Delhivery, TCI Express | E-commerce boom | Fuel costs, competition |
| MSME Lending | Ujjivan, Aye Finance (unlisted) | Credit penetration | NPAs, regulatory oversight |
| Agri-Tech | DeHaat, WayCool (unlisted) | Farm-to-market platforms | Policy volatility |
| Construction | PSP Projects, Capacite Infraprojects | Infra push, urbanization | Execution delays |
Chokani emphasized that investors should look beyond headline valuations and focus on cash flows, scalability, and market share gains in these sectors.
🧭 Investment Strategy for Retail Investors
- Focus on Mid-Caps: Many multibaggers are found in mid-cap and small-cap segments.
- Track Formalization Metrics: GST filings, digital adoption, and employee formalization.
- Avoid Overhyped IPOs: Stick to companies with proven execution and governance.
- Diversify Across Informal Sectors: Don’t concentrate only on tech or finance.
🗣️ Expert Reactions
- Raamdeo Agrawal (Motilal Oswal): “The next 100x returns will come from companies that solve India’s informal inefficiencies.”
- Nilesh Shah (Kotak AMC): “Formalization is the biggest structural reform in India’s economy. Investors must align portfolios accordingly.”
- Radhika Gupta (Edelweiss MF): “We’re seeing a surge in investor interest in MSME-focused funds and logistics platforms.”
Disclaimer
This news content is based on verified public statements, investment summit coverage, and sectoral data as of October 11, 2025. It is intended for editorial use and public awareness. The information does not constitute investment advice, stock recommendations, or financial guarantees and adheres to ethical journalism standards.
