Thread by @investor_sr33

Thread 🧵

How I analyze Indian Microcap & SME stocks using AI

I focus on asking the right prompts across AI tools.

Just use them on your AI like chatgpt , perplexity and thank me later .

1) Microcap Order Book + Execution Reality Check

Prompt:
“You are an Indian microcap analyst. For [COMPANY NAME] (NSE/BSE), build a structured note covering:
Order book: latest value, segment split (EPC/defence/rail/renewables/etc.), client quality, margin profile, retention/LD clauses, advances, execution cycle, and historical conversion to revenue.

Execution: quarterly execution trend, capacity constraints, working capital cycle, procurement dependencies, subcontracting risk, and site-level bottlenecks.

Red flags: aggressive revenue recognition, unusually high other income, sudden debtor jump, related-party transactions.
Output: a table + a 10-bullet ‘investment memo’ with base case / bull case / bear case.”

2) Management Fraud / Governance Deep-Dive (Microcap)

Prompt:
“Act as a forensic equity researcher. For [COMPANY NAME], perform a management integrity and fraud-risk scan:
Promoter background, past litigations, regulatory actions, auditor changes, resignations (CFO/CS/independent directors), pledging history

Related-party transactions and loan/advance patterns

Cash flow vs PAT divergence (5-year), receivables build-up, inventory anomalies

Auditor notes/qualifications and contingent liabilities

Any signs of round-tripping, channel stuffing, or overstated order book
Give a Risk Score (1–10) and list the top 12 due-diligence questions to ask management.”

3) Shareholding Pattern + Operator/Distribution Signals

Prompt:
“You are analyzing shareholding and capital-market behavior for [COMPANY NAME]. Provide:
Promoter holding trend (8 quarters), pledges, promoter buying/selling

FII/DII/MF/Insurance presence (if any) and what it signals

Public shareholding quality: concentration risk, top holders (if available), ‘HNI clustering’ indicators

Preferential allotments/warrants, promoter infusion vs dilution, ESOP impact

Identify operator-like signals (sudden spikes, frequent corporate actions, low float traps)
Output: ‘Shareholding Thesis’ + 3 scenarios for how float/demand could evolve.”

4) Volume, Price Action, and Delivery-Based Accumulation (SME/Microcap)

Prompt:
“Be a technical + tape-reading analyst for [COMPANY NAME] (microcap/SME). Analyze:
Volume expansion vs 20D/50D averages, delivery % trends (if available)

Breakout quality: base structure, volatility contraction, gap behavior, upper circuits frequency (SME)

Liquidity risk: bid-ask spread, impact cost, traded value/day

Accumulation vs distribution signals: OBV/VWAP behavior, absorption days, reversal days
Provide entry plan, invalidation (stop), and liquidity-aware position sizing for SME conditions.”

5) SME Stock Execution Playbook (Pre-Trade + Post-Trade)

Prompt:
“You are building an SME execution and risk playbook for trading/investing in [COMPANY NAME]. Cover:
Pre-trade checks: liquidity, circuits, market maker presence, spread, daily traded value, shareholding concentration

Catalysts: order wins, credit rating changes, capex commissioning, tender pipeline, peer re-rating

Risk controls: max position size by liquidity, staggered entries, no-market-orders rule, circuit-lock risk, exit planning under illiquidity

Post-trade monitoring: order-to-revenue conversion, debtor days, promoter actions, bulk/block deals
Output: a 1-page checklist + a trade plan (conservative / aggressive).”

Follow @investor_sr33 for high-conviction threads on microcaps, and macro plays before they hit the mainstream.