Every year, I look for companies with true long-term terminal value — businesses that may look average today but have the potential to compound over the next decade into 20x or 30x giants. My criteria is simple: the downside should be limited, the industry must be large enough to scale, and the long-term risk–reward must make sense. I usually take only ten high-conviction bets and deploy significant capital into them rather than splitting money across fifty different stocks. If an idea is strong enough, I build my position aggressively for three straight months using my monthly savings until I hit around ₹15 lakhs per company. This year, I’ve already identified a few promising opportunities, and among them is my third major bet of 2024 — a twin play involving two companies in the same ecosystem. Before diving into that, it’s important to revisit the first two bets to understand the logic behind my choices.
My first major bet was Max India, an ultra long-term play with a 10–15 year horizon. At a market cap of about ₹1,100 crore, the business looks unexciting on the surface. It runs an old-age-home business — a segment that is still small in India but positioned to explode as the country ages. The Max Group, backed by Axis Bank, has strong financial backing, very low debt, and over ₹600 crore in reserves and cash. The company is asset-heavy, with significant land and building value, and currently clocks around ₹100 crore in revenue. Even though the stock hasn’t started its upward journey yet, the risk is minimal given the asset base and cash reserves. If execution improves and the old-age sector grows as expected, a 20x expansion in market cap over the next fifteen years is not unrealistic.
My second bet is Network People Services Technologies (NPST), a pure fintech play riding India’s UPI explosion. The business sits under a high PE, around a ₹5,000 crore valuation, but the growth is phenomenal — nearly 15% quarter on quarter and 100% year on year. With strong cash flows, competent management, and aggressive guidance for the coming years, the company fits the profile of a mid-term multibagger. I recently invested around ₹27 lakhs into NPST and intend to trim the position back to about ₹15 lakhs once the stock gives me 2–3x returns. It’s a scalable IT-led model with low capex requirements and enough momentum to justify the valuation.
My third major bet required deeper thought because I wanted exposure to India’s long-term construction and infrastructure boom. Before finalising the bet, I studied a remarkable private company: OfBusiness. It is a B2B e-commerce platform that has reached over ₹19,000 crore in revenue by cutting out layers of distributors between suppliers like Tata Steel or JSW and small manufacturers across the country. They operate on thin margins but massive volumes, and their model works because they aggregate demand and procure raw materials in bulk directly from the source. Their lending subsidiary, Oxyzo, adds another major revenue driver by offering short-term credit to SMEs at competitive rates, reducing their reliance on expensive bank loans. Together, the businesses have grown rapidly and are now targeting an IPO reportedly at a valuation of $9 billion.
This understanding led me to a listed counterpart that has just begun building a similar model, but with the backing of two powerful Indian groups: Apollo and Havells. The main business, operating under the SGM name, is a B2B e-commerce platform for construction and industrial materials. The promoters have invested aggressively, partnered with leading suppliers, and onboarded hundreds of customers. Although still early in its journey, SGM has already touched ₹3,600 crore in revenue with ₹87 crore in profit, indicating a promising trajectory. What makes it especially interesting is the value gap: while OfBusiness sits at a valuation 15 times higher, its revenue is only six times more than SGM. This suggests a massive potential rerating opportunity as SGM scales. The company is debt-light, holds over ₹1,100 crore in cash, has no inventory risk because it buys only after receiving orders, and benefits when raw material prices rise. If SGM executes well and reaches around ₹20,000 crore in revenue by FY27 as guided, even a conservative valuation multiple could push the stock into the 10–20x territory over the next decade.
Adding further strength to the thesis is the lending arm, SG Finserve, which mirrors the Oxyzo structure of OfBusiness. SG Finserve has an expanding loan book, near-zero debt, over ₹800 crore in reserves, and ambitious targets to grow its book to ₹6,000 crore by FY27. It turned profitable quickly after promoter acquisition and continues to be well capitalised. With the lending arm supporting the B2B platform, the ecosystem forms a powerful twin-engine compounding model — one scaling volumes and distribution, the other generating consistent lending income.
Considering valuation, management, cash position, reserves, and long-term industry growth, I believe SGM and SG Finserve together represent one of the best risk-reward opportunities available today. The downside appears limited, especially since the open offer price of ₹450 is already above the current market price. The upside, however, could be significant as India expands steel capacity, infrastructure spending accelerates, and SMEs adopt digital procurement channels at scale. My plan is to begin building a position in SGM first, aiming for ₹15 lakhs over the next few months, and then evaluate adding to SG Finserve later.
So far, I’ve identified four strong long-term bets for my 10-stock ₹1.5 crore portfolio. My target is to find six more companies that will grow if India grows — businesses that can withstand political cycles, global uncertainty, and inflation while compounding steadily over the next decade. These are not short-term trades but high-conviction investments meant to sit untouched until they reach their long-term terminal value. As I continue refining the list, the focus remains on structural growth sectors, strong balance sheets, and founders committed to long-term execution.
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