4 small-cap stocks held by more than 20 mutual fund houses

Summary: Small-cap companies often come with the tag of high risk, high reward. Yet, the fact that several fund houses continue to bet on them shows growing conviction in their potential. Here, we look at four small-cap stocks that caught the fancy of multiple mutual funds… Small-cap stocks are where fortunes can be made, or lost. They are riskier and more volatile compared to large and mid caps. Yet, they’re also where mutual fund managers go scouting for tomorrow’s leaders. A small-cap company that cracks the right market, scales efficiently and sustains profitability can potentially deliver outsized returns over time. So, which small-cap names are fund managers backing today? Our results show a diverse mix of businesses, from IT to HR solutions, financial advisory and housing finance. So, without much ado, here are the four small-cap favourites of mutual funds as of August 2025. #4 Birlasoft Held by: 21 of 44 fund houses Fund houses with the most sizeable stake in the company Kotak Mahindra Mutual Fund: 6.74 per cent  HDFC Mutual Fund: Nearly 2.5 per cent  ICICI Pru Mutual Fund: Over 2 per cent  Key metrics of the company Value Research Rating: 4 stars P/E: 22 Revenue growth in the last three years: 7.1 per cent RoCE: 22 per cent RoE: 16.3 per cent What does the company do Birlasoft is a Pune-based IT services firm that helps companies worldwide with digital transformation. It works in areas such as cloud, automation, data analytics, customer experience and enterprise systems. The company also develops industry-specific solutions in fields like supply chain management, insurance and engineering, serving clients across banking, healthcare, manufacturing, energy and more.  #3 TeamLease Services Held by: 22 of 44 fund houses have