Liquidity challenge

In the third part of the series, we discuss how a limited list of investment worthy stocks along with liquidity pose a challenge to fund managers. The Indian market is not very deep despite the fancy market-cap and free-float numbers that everyone likes to talk about. Except for a few large-cap stocks, fund managers can find it quite difficult to both build and liquidate large positions in the remaining stocks in the listed space. Aashish Somaiyaa of Motilal Oswal AMC believes that while managing liquidity is a little easier for large and multi-cap funds, liquidity does limit fund capacity for mid-cap and small-cap funds which stick strictly to their mandate. "If you define a small-cap stock as less than