MF stress test impact: Stocks that larger-sized smallcap funds increased exposure in March

Mutual fund companies now routinely disclose the stress tests results of their midcap and smallcap funds by 15th of each month, as instructed by the market regulator SEBI. The purpose of the stress tests is to reveal the latent risk in the invested midcap and smallcap space and assess a fund's readiness in the event of an unfavourable scenario. The regulator has been concerned over the frothy valuation in the mid and smallcap segments.
The disclosure reveals that funds with larger asset size could take longer to liquidate their portfolio compared to that of smaller-sized funds. Interestingly, within the larger size smallcap funds, few funds have reported taking relatively shorter days to liquidate their portfolio.
While the liquidity disclosure requirement is unlikely to impact the portfolio construction of the midcap and smallcap funds, there's a chance that fund managers may increase their holdings in stocks with higher liquidity to be in a better position to compete within the category. To be sure, going forward, any new addition to the portfolio will necessitate improved liquidity management.
Here are the lists of stocks wherein the larger asset sized smallcap funds increased their exposure notably in March. Source: ACEMF.

Nippon India Small Cap Fund
Corpus: Rs 45,749 crore

HDFC Small Cap Fund
Corpus: Rs 27,574 crore

Also see: MF Stress Test Round 2: Have top small-cap funds improved their liquidity positions?

SBI Small Cap Fund
Corpus: Rs 25,435 crore

Axis Small Cap Fund
Corpus: Rs 19,030 crore

Quant Small Cap Fund
Corpus: Rs 17,349 crore

Also see: MF stress test: Check whether your smallcap fund has these illiquid stocks

Kotak Small Cap Fund
Corpus: Rs 13,882 crore

HSBC Small Cap Fund
Corpus: Rs 13,401 crore

DSP Small Cap Fund
Corpus: Rs 13,039 crore

Franklin India Smaller Cos Fund
Corpus: Rs 11,540 crore

Canara Robeco Small Cap Fund
Corpus: Rs 9,403 crore

Also see: MF stress test, round 2: How did the 10 largest midcap funds do?