Abakkus launches Small Cap Fund as small-cap universe tops 5,000 stocks; NFO Feb 26–Mar 12

The fund will primarily invest in small-cap equities, with limited exposure to non-small-cap stocks, debt, and InvITs, and will be benchmarked against the NIFTY SmallCap 250 TRI.

• Abakkus Mutual Fund launches Small Cap Fund NFO Feb 26-Mar 12
• Fund targets 65-70 small-cap stocks, minimum investment is Rs 500
• Small caps now make up 19 percent of the overall market

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Abakkus Mutual Fund has launched its second equity scheme, the Abakkus Small Cap Fund, an open-ended fund focused on India’s small-cap companies. The new fund offer (NFO) opens February 26 and closes March 12.

The Sunil Singhania-backed fund house launched its first scheme in December 2025, the Abakkus FlexiCap Fund, which raised about Rs 2,468 crore from nearly 38,000 investors across 2,000 cities. Since then, the fund has crossed Rs 3,000 crore in assets under management (AUM), with the investor base growing to around 56,000, spanning Tier 1 as well as Tier 2–3 cities.

Small-cap stocks make up roughly 19 percent  of the overall market, said Sanjay Doshi, Head of Investments and Research at Abakkus.

He pointed to the breadth of the segment: nearly 5,000 small-cap stocks, compared with about 150 mid-caps. Over the past six to seven years, revenues in the NIFTY Small Cap 250 index have grown 1.9x, profits have more than doubled, and debt-to-equity ratios have declined, Doshi said.

“Many high-growth sectors, from electronics manufacturing to aerospace, chemicals and pharmaceuticals, have a strong presence in the small-cap space,” he added. The fund plans to hold around 65–70 stocks, with position sizes in smaller companies capped at roughly 3 percent.

Sunil Singhania, Founder of Abakkus, agreed that there was an inherent volatility in the segment. “Markets are like cardiograms. Small caps tend to be more volatile, but alpha is also created during lows. I would say that we should not claim volatility at risk.

Volatility is very different from risk. I think over a period of time... our horizon of investment for investors is 3 to 5 years because then volatility becomes your friend rather than your foe,” he said.

The fund will primarily invest in small-cap equities, with limited exposure to non-small-cap stocks, debt, and InvITs, and will be benchmarked against the NIFTY SmallCap 250 TRI. The minimum investment is Rs 500, and both direct and regular plans are available.