Nippon India Mutual Fund has decided to open lumpsum investments in Nippon India Small Cap Fund after a gap of two years. Do you think the small cap space has become attractive after the recent sharp fall in the market?
Yes, we think the small cap space has become attractive. The kind of damage in this space is humongous. Almost 55% of companies in this space have fallen by more than 40% in the last few months. As far as valuations are concerned, as of last week, on a trailing basis, 40% companies in this space were available at EV/EBITDA of less than 6; As much as 43% companies were available at a P/E of less than 10 and around 51% companies were available at P/BV of less than 1.2.
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