3 SmallCap stocks where FIIs and DIIs have increased their stake

January 24, 2026

The BSE Small-Cap 250 index fell 0.3% during the quarter, from Rs 6,687.87 on September 30, 2025 to Rs 6,667.48 on December 31, 2025. The muted move reflects continued caution among investors in the small-cap sector even as stock-specific volatility remained high.

While the index did not perform well in the December 2025 quarter, share ownership data shows that both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) bought more of certain small-cap stocks.

This indicates selective, bottom-up positioning rather than broad exposure to the segment.

We look at three small-cap stocks where both FIIs and DIIs increased their holdings during the December 2025 quarter.

Which small cap stocks are FIIs and DIIs buying?

#1 Time Technoplast Limited

First on the list is Time Technoplast Ltd.

The company is active in industrial packaging, composite cylinders, infrastructure pipes and material handling solutions for industries such as oil and gas, chemicals, food and logistics.

Over the years, the company has built up a varied product range, with a growing focus on high-quality and specialized markets.

For the December 2025 quarter, the company has seen an increase in holdings of FIIs and DIIs.

Source: EquitymasterOn December 22, 2025, the company successfully tested hydrogen-powered drones using high-pressure composite cylinders it made in-house. The tests demonstrated the use of lightweight composite cylinders for hydrogen storage in unmanned aerial vehicles.

The development proved that composite cylinder technology could be used for more than just storing gas, and the company took a step forward in finding new applications for hydrogen.

Subsequently, on January 1, 2026, the Petroleum and Explosives Safety Organization (PESO) authorized Time Technoplast to produce high-pressure composite cylinders. This meant it could start making them for use in regulated gas applications. The authorization made things clearer from a regulatory perspective and came after the technological validation that had already taken place.

On December 31, 2025, the management announced to the stock exchanges that it had received an order from Hindustan Petroleum Corporation Ltd (HPCL) for its packaging business. The development improved short-term commercial visibility, even though the value of the order was not made public.

The successful hydrogen-related trials, regulatory approvals and customer interest have bolstered confidence in the company’s move into higher value specialty applications. This sequence of developments is likely to have contributed to the increase in investment from foreign and domestic institutional investors during the quarter.

For more details, see Time Technoplast’s company fact sheet and quarterly results.

#2 Jamna Auto Industries Ltd

Next on the list is Jamna Auto Industries.

Jamna Auto Industries is the largest manufacturer of commercial vehicle suspension systems in India. It is a leading manufacturer of leaf springs, parabolic springs and related components.

It sells to most of the top OEMs (Original Equipment Manufacturers) and has been slowly moving into higher margin areas.

Institutional interest in the stock grew during the December 2025 quarter.

Source: EquitymasterJamna Auto opened its U-bolt factory in Indore in July 2025. This was a step toward backward integration and cost reduction.

In addition, work continued on the 30,000-ton integrated suspension installation. This plant is expected to increase capacity for higher value suspension products and make margins more stable in the medium term.

From an industry perspective, Jamna Auto continues to be seen as a key beneficiary of the ongoing upcycle of commercial vehicles, driven by infrastructure spending and the need to replace old vehicles.

The company has invested in its aftermarket brand “JAI Ho”, which targets the unorganized aftermarket to stabilize its revenues. This makes it less dependent on cyclical OEM sales.

The balance and operational discipline are a big plus. As of December 2025, Jamna Auto had very little debt, with a debt-to-equity ratio of 0.05. Operating efficiency remained high, with a return on equity of 20.96% and a return on invested capital of 26.4%.

This is because the company managed its costs and used its assets more efficiently than other companies in the automotive-related sector. The board’s decision to declare a 100% interim dividend of Rs 1.1 per share in November 2025, which meant a payout ratio of 46%, further strengthened the case for DIIs seeking stable cash returns and growth.

For more details, see Jamna Auto’s company fact sheet and quarterly results.

#3 Latent View Analysis

Latent View Analytics is a data analytics and consulting firm that works with clients in the US and around the world across a wide range of industries, including technology, retail, financial services and consumer-facing businesses.

The company sits at the intersection of business intelligence and AI-driven insights as it focuses on advanced analytics, data engineering and decision sciences.

During the December 2025 quarter, both FIIs and DIIs increased their equity stakes, supported by a combination of strategic growth initiatives, emerging technology demand and execution visibility.

Source: EquitymasterAccording to recent reports, management talked about how the GenAI pipeline is growing and how GenAI-related projects are expected to help grow revenue significantly. The CFO said more and more companies are now using GenAI and these partnerships could lead to big opportunities. This gives investors more confidence in the company’s next phase of growth.

Recent commentary on the results announcement said success had been achieved in achieving revenue and cost savings, particularly in key business sectors such as consumer products and financial services.

This has improved the services offered and developed relationships with customers, which institutional investors often see as good for the long-term quality of earnings.

Latent View has experienced strong revenue growth for several consecutive quarters, with reported operating revenue increasing both year-over-year and quarter-over-quarter.

Technology-driven growth, better execution metrics and diversified industry demand have made Latent View more attractive to institutional investors, even as the overall sentiment in the small-cap space is still negative.

See Latent View Analytics for more details. company information sheet and quarterly results.

Conclusion

When institutional investors from both within and outside the country show interest in specific stocks, it usually means they are comfortable with a company’s strategy and performance.

When such purchases occur during uneven market phases, it reflects selective optimism rather than broad confidence.

But just because institutions are interested doesn’t mean you should invest. These companies may still experience problems with profit growth or sector-specific problems.

Before making any investment decisions, investors should look at how long the growth drivers will last, how the company’s finances compare to those of its competitors, and whether the current market price is reasonable given the circumstances.

Investors should evaluate the company’s fundamentals, corporate governance and stock valuations as key factors when conducting due diligence before making investment decisions.

Have fun investing.

Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such. Read more about our referral services here…