During the new fund offer (NFO) period for its open-ended equity scheme “Motilal Oswal Small Cap Fund”, Motilal Oswal Asset Management Company (MOAMC) achieved a collection of over ₹1,350 crores. This marks the highest-ever amount gathered for any small-cap active fund NFO in India.
The investment firm unveiled the introduction of an open-ended equity scheme focused primarily on small-cap stocks. Open for public subscription from December 5, 2023, to December 19, 2023, the scheme aims to achieve capital appreciation by emphasizing investments in small-cap stocks. It’s important to note that the realization of the scheme’s investment objective is not guaranteed.
MOAMC’s inaugural active fund launched as an NFO after a four-year interval, has garnered widespread interest from investors throughout India. This is evident in its clientele spanning more than 50 cities in the country. Notably, retail investors have shown substantial participation, with over 1.5 lakh investors subscribing to the NFO at an average ticket size of ₹85,000.
The fund has also succeeded in attracting SIP registrations, surpassing 15 crores across 24,000 investors. The asset management company (AMC) has received support from approximately 5000 distribution partners, guiding investors for long-term wealth creation through investment in the fund.
Lately, the Indian stock markets have witnessed a noteworthy upswing, particularly highlighted by the Small Cap 250 index, which has outperformed and taken the lead in impressive gains during 2023. The earnings growth in the small-cap sector has seen a substantial compounded increase of 48% over the past two financial years.
Speaking on the closure of NFO, Navin Agarwal, Executive MD & CEO, Motilal Oswal Asset Management Company, said, “We are thrilled with the remarkable success of our Small Cap Fund’s NFO collection, with a staggering collection of over ₹1350 crores. The subscription number is a testimony of investors’ confidence in Motilal Oswal’s investing process that seeks to build high-quality, high-growth investment portfolios. Motilal Oswal Small Cap Fund seeks to apply this time-tested investing process to create a portfolio of predominantly Small-cap stocks. Risk management plays a crucial role for investing in small caps and our rigorous framework will help us mitigate the volatility associated with small caps.”
Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC, added, “Our Small-cap NFO’s unprecedented and staggering collection is a testimony to our team’s resilience, investors’ trust, and support of our IFA network and other platforms. We recognise that this success comes with a heightened responsibility. It compels us to go above and beyond, ensuring that our clients receive the best service and that we meticulously curate portfolios focusing on delivering superior returns.”
The realm of small-cap stocks surpasses both large caps and midcaps, boasting 537 stocks with a market capitalization exceeding ₹2,000 crores. This extensive stock universe presents ample opportunities for alpha creation, as fund managers can potentially pinpoint stocks trading at substantial discounts to their intrinsic valuation.
Over the last 15, 10, and 5 years, the Small Caps Index has generated lasting wealth for investors, compounding returns at rates of 19.32%, 20.34%, and 22.06%, respectively. The objective of the Motilal Oswal Small Cap Fund is to uphold a well-balanced portfolio, ensuring a minimum exposure of 65% to small-cap stocks.
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Published: 22 Dec 2023, 10:01 AM IST