8 months ago

Small-Cap Funds Limit Microcap Exposure to 2%

Small-Cap Funds Limit Microcap Exposure to 2%
Small cap portfolio exposure to microcaps limited to ~2% · thehansindia.com

Small-cap funds in India mostly invest in larger small-cap stocks, with only about 2% going to the smallest companies, called microcaps.

These funds have around ₹3.7 lakh crore invested across 32 schemes.

Most of the money is put into the top 750 stocks, with a big focus on the core small-cap segment.

Some money is also kept in larger companies, cash, and debt for safety.

Small-cap stocks have grown a lot in the past five years, especially those ranked lower.

Investors are putting more money into small-cap funds even when they lose value in the short term, showing they believe in long-term growth.

Some well-known companies are actually small-caps, even though people might think they are bigger.

This shows that small-cap funds are important for accessing unique sectors and creating long-term value.

Key facts

Total AUM
₹3.7 lakh crore
Number of Schemes
32
Top 750 Stocks Allocation
83%
Core Small-Cap Allocation
63%
Stocks Ranked 751–1000 Allocation
7%
Large and Mid-Cap Allocation
20%
Cash and Debt Allocation
6%
Net Inflows (Dec 2024 - Nov 2025)
₹53,165 crore
Small-Cap Returns (Dec 2024 - Nov 2025)
-2.4%

Quotes

Juzer Gabajiwala

Director at Ventura

“By nature, smallcaps are volatile and at times risky. However, the category has evolved, portfolio construction has become more disciplined, and the opportunity set continues to broaden. Patience is the key for any portfolio investing and to create 'alpha' one must have smallcaps in the portfolio.”
thehansindia.com
“Many stocks perceived as large- and mid-cap are actually small-cap stocks for fund managers as per AMFI classification.”
thehansindia.com

Sources

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