Smallcap pie grows as retail investor faith soars

MF's average holding in Smallcap 250 Index firms peaks at 9.26%

- ABHISHEK KUMAR

Retail investors now own a bigger slice of smallcap companies than at the start of 2023-24 (FY24), underscoring their growing conviction about investing in this red-hot space.

Data from Capitaline shows mutual funds' (MFs') average holding in the National Stock Exchange Nifty Smallcap 250 rising to 9.26 percent from 8.67 percent during the first six months of FY24, with the number of companies with over 20 percent MF holdings increasing from 24 to 28.

In comparison, MF holdings in Nifty50 companies have gone up only marginally, from 9.67 percent to 9.75 percent. This year's rise in MF ownership in small-caps is significant, considering that the average ownership rose only by 1 percentage point between March 2021 and March 2023.

Smallcap schemes have seen record inflows in FY24, largely on the back of their superior performance compared to other schemes.