Tata Mutual Fund has announced the launch of NFO for Tata Small Cap Fund – an open-ended scheme, which aims to invest in stocks of small cap companies.
The company claims that they will pick companies that are likely to grow substantially faster than the market and have the potential to become mid-caps in the future.
In a press release, the company said, “As of June 2018, end, the 251st company had a market cap of Rs.9849 crore. Interestingly there are 4826 companies in the small cap definition out of which almost 247 companies with a market cap between Rs.3000 crore to Rs.9849 crore. This presents a large opportunity of businesses to choose from, with high corporate governance, strong balance sheets and potentially high profit growth performance. There are many Indian and global MNC trading in the small cap space with strong business profile.”
Chandraprakash Padiyar, senior fund manager, who currently manages Tata Hybrid Equity Fund and Tata Large & Mid Cap Fund will manage this fund. He said, “Warren Buffet once said - be fearful when others are greedy and greedy when others are fearful. I would like to point out that valuations are becoming attractive in many cases which in turn can lead to better return potential in the long term. Given the market correction, especially in small cap stocks, there is an interesting long-term investment opportunity."
Prathit Bhobe, CEO & MD, said, "We believe our experience in bottom-up stock picking will help identify opportunities in the small cap space. Indian markets offer good investment opportunities and despite the short term volatility, we recommend that investors look to invest with a long term horizon."
