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These are the companies which have survived one of the toughest periods for Indian economy post demonetization, GST, debt crises etc and hence of much strong breed. Second, the quality of companies which are there in this space are now much better. One, valuation during panic had become mouth-watering. There are many reasons for this recovery. However, the pace of recovery and size of recovery in small cap space since then, has surprised many market participants. (This is the time when we opened our fund for lump sum subscription).Īt that time the general belief was large caps would recover first and small caps would take time to recover. However, that fall also provided very attractive entry point for long term investors.
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In this fall, small cap segment was one of the worst hits. Small cap Index at that time was underperforming large cap index by huge margin, so risk-reward was in favour of small cap and we were indeed expecting this space to do well.īut then suddenly pandemic and lockdown happened creating all round panic in the market. In addition, the small cap segment had already been in bear market for more than two years (since Jan 2018). You are right, just before pandemic started, there were signals that economy is bouncing back after years of subpar growth. Do you see a revival of the small cap segment anytime soon? Many stock market pundits have been predicting the revival of small and mid-cap segments for a while before the pandemic made such predictions futile. In fact, our view is that this is time to focus more on this space," he says. "our view is that Indian economy is on the cusp of multi-decade growth and there would be many opportunities in this space. Shivani Bazaz of spoke to Samir Rachh, Fund Manager – Equity Investments, Nippon India Mutual Fund, find out what is in store for small cap investors. Small cap investors are concerned about the performance of their schemes for a while now.