The Indian stock market is going through a tumultuous time, with analysts waiting patiently for the beginning of capex cycle and revival of earnings growth. While some market participants believe that the bull cycle has already come to an end and a bear phase has begun, others consider it to be a long-run bull phase, wherein the recent market volatility will pass soon.
Meanwhile, small-cap stocks have taken a beating in recent times. The BSE Small-Cap Index has been down by almost 15 per cent in the last one year, with several stocks in this space having been corrected more than 15 per cent.
Small caps are like a double-edged sword. They are the first ones to rise when the market enters a bullish phase but take a hard beating when things turn sour. Definitely, investing in these stocks is not for the weak-hearted.
In such a volatile scenario, it can be worth looking at the activities of mutual funds in the small-cap space. We have analysed various investment decisions taken by mutual funds for around 467 small-cap companies having a market cap of more than Rs 500 crore. Our findings are as follows:
Disclosure: The intent of the article is not to recommend any specific stocks. If you wish to invest in any of the above-mentioned securities, please do thorough research.
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