Fund Managers’ Top Picks: Small-Cap and Micro-Cap Stocks

As the Indian stock market continues to flourish, active fund managers are constantly looking for new opportunities to maximise returns for their investors. While large-cap stocks listed on the Nifty 500 index have traditionally been the preferred choice for many investors, fund managers have shifted their attention towards small-cap and micro-cap stocks listed below the Nifty 500.

Small-cap and micro-cap stocks, defined as companies with market capitalisations below INR 10,000 crore and INR 2,000 crore, respectively, are often overlooked by investors due to the lack of liquidity and research coverage. However, these stocks hold the potential for exceptional returns as long as the fund manager can correctly identify the potential winners.

Here are some of the most popular holdings among active fund managers that are listed below the Nifty 500:

  1. Polycab India Limited: The leading electrical goods manufacturer has been a popular choice among fund managers, who have been buying the stock due to its strong brand recognition and growth potential.
  2. Kridhan Infra Limited: The infrastructure company has been attracting attention due to its robust balance sheet and high revenue growth, making it an attractive investment opportunity for fund managers.
  3. Graphite India Limited: The graphite electrode manufacturer has been a favourite among fund managers due to its strong growth prospects, driven by the increasing demand for graphite electrodes in the steel industry.
  4. Reliance Industries Limited: Despite its large market capitalisation, Reliance Industries remains a popular choice among fund managers due to its diversified business portfolio and strong financials.
  5. Bajaj Consumer Care Limited: The consumer goods company has been attracting attention due to its strong growth potential, driven by the increasing demand for personal care products in India.

The small-cap and micro-cap stocks that are listed below the Nifty 500 offer fund managers a unique opportunity to generate exceptional returns for their investors. Fund managers can make the most of this under-researched stock market segment by carefully identifying potential winners.