Five small cap stocks that gained MFs interest

If you are looking for smallcap stock ideas, then the portfolio holdings of smallcap funds is a good place to choose.

It is mandatory for such equity mutual funds to invest in stocks that rank after the first 250 stocks in terms of market capitalization. Since mutual funds do their due diligence and research before choosing smallcap stocks, a segment where information is sparse, it pays to bet on already validated stock ideas by institutional investors.

Here are the details of the most popular smallcap stocks held by 24 funds in this category.

portfolio mantra

Invested in over 530 securities, including two dozen small cap funds. But it is at the category level, that is, about 10 per cent of the 4,800 odd stocks listed under this segment.

From a category average perspective, smallcap funds typically hold 5 per cent in largecap stocks, 15 per cent in midcaps, 72 per cent in smallcaps and the rest/cash etc.

Generally, smallcap fund portfolio holdings vary with each other with 44 as minimum and around 150 maximum. Low-asset funds in the smallcap space tend to have fewer stocks, while larger ones tend to diversify into many.

Some of the largest and well-known smallcap funds include Nippon India Small Cap, SBI Small Cap, HDFC Small Cap, Axis Small Cap and DSP Small Cap. From a sectoral perspective, 24 smallcap funds have exposure to 43 sectors.

However, industrial products dominated at a fund category level with a weightage of over 11 per cent, followed by consumer durables (7.5 per cent), software (6.3 per cent), chemicals (6 per cent), construction (5.3 per cent), consumer Comes. Non-durables (5.1 per cent), auto ancillaries (4.7 per cent), banks (4.6 per cent) and finance (4.5 per cent).

Most Popular Stocks in Smallcap Funds

Using ACEMF data, we scanned the portfolios of all smallcap equity funds and found the most owned stocks in terms of portfolio holdings.

Here are those ‘popular’ stocks:

  1. Carborundum Universal: This company of the Murguppa Group manufactures abrasives, ceramics, refractory products and electro-minerals. This stock is held in 15 smallcap fund portfolio i.e. around 62 per cent.
  2. Fine Organic Industries: This chemical company is a leading manufacturer of menthol crystals and natural mint derivatives. This share is held by 12 smallcap funds, which means it is present in every second fund of this category.
  3. India’s Tube Investments: Another Muruguppa Group firm, specializes in engineering, bicycles, metal products and chains. The stock is owned by 10 Smallcap Fund Portfolio.
  4. Brigade Enterprises: It is a real estate company and a leading property developer in the South. The stock is held in 14 Smallcap Fund Portfolio.
  5. Grindwell Norton: Controlled by Saint-Gobain, a pioneer in grinding wheels since the 1940s. The stock is placed in 10 small cap funds.
  • #6-Blue Star: is a leading home appliance company, manufacturer of air conditioners, air purifiers and water coolers. The stock is housed in nine smallcap fund portfolios.
  • #7-KPR Mill: The company is recognized as one of the largest vertically integrated listed companies with a diverse business focus spanning Yarns, Fabrics, Garments and White Crystal Sugar. The stock is present in 11 small cap funds.
  • #8-City Union Bank: A The headquarter of the private bank is in Kumbakonam, Tamil Nadu. The stock is present in 13 smallcap fund portfolio.
  • #9-Sion: It is an engineering, manufacturing and digital technology solutions company, formerly known as Infotech Enterprises. The stock is held by nine small cap funds.
  • #10-Bajaj Electricals: A consumer electrical appliance manufacturing company, this stock is held by only two smallcap funds i.e. HDFC Small Cap and Nippon India Small Cap.

For those wondering about the next 10 most owned funds among smallcap stocks, don’t worry.

The list includes Timken India, KPIT Technologies, Sheela Foam, Naveen Fluorine International, Ratnamani Metals & Tubes, KEI Industries, Narayana Hrudayalaya, eClerx Services, Galaxy Surfactants and CCL Products (India). These values ​​are compiled by terms.

On number of schemes, i.e. number of stocks present in 24 smallcap schemes, the top-20 most owned/popular list has some interesting inclusions such as Birlasoft, PNC Infratech, Rolex Rings, V-Mart Retail, KNR Construction, Multi Commodity Exchange of India, KEI Industries, Persistent Systems, Can Fin Homes, JB Chemicals & Pharmaceuticals and Balrampur Chini Mills.

Each of these stocks is present in 11-14 smallcap fund portfolio.

Published on

September 26, 2022


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