In FY24, small-cap mutual fund assets increased by 83% to Rs 2.43L cr

Flows, increased involvement from individual investors, and positive market conditions have increased the assets of the small-cap mutual fund category to Rs 2.43 lakh crore by the end of March 2024, an 83 per cent increase over the same period the previous year.

The spike in assets was accompanied by a rise in investors; in March 2024, there were 1.9 crore folios, up from 1.09 crore the previous year, meaning that 81 lakh new investors joined the investor pool. This demonstrates the preference of investors for small-cap funds.

According to Gopal Kavalireddi, Vice President, Research at FYERS, the Indian economy’s development trajectory is drawing more attention, prompting a large number of unlisted small-cap companies to go to the capital market for assistance. For investors considering chances for long-term development, this trend presents favorable options.

But he also said that variables like the general elections, monsoon predictions, economic activity, inflation, GDP estimates, and FY25 profits growth are probably going to affect the values of small-cap companies and create volatility in this market.

saw a Rs 94 cr outflow due to worries over Sebi

In FY24, small-cap funds received inflows of Rs 40,188 crore, which was more than the Rs 22,103 cr inflows seen in FY23. For the first time in more than two years, small-cap funds had a net outflow in March, totaling Rs 94 crore.