15 smallcap gems that category III AIFs love to hold

Alternative Investment Funds (AIFs) are gaining attention among the large investors wanting diversification by participating in private markets. As per the market regulator SEBI, the funds raised by the AIF industry grew by 97% in the last three years to Rs 3.7 trillion as of June 2023. The commitment raised by the industry as of June 2023 was Rs 8.4 trillion.
Unlike mutual funds, AIFs are meant for high-networth and institutional individuals. Additionally, they aren’t as transparent as mutual funds. The minimum ticket size of Rs 1 crore. As per the regulator, AIFs are divided into three categories as Category I, Category II, and Category III. While the Category I AIFs invest in Venture Capital Funds, Angel funds and Infrastructure funds, Category II AIFs offer exposure to Private equity funds, Real estate funds and Debt funds.

Category III AIFs comprise long only funds, long short funds and hedge funds. They mostly invest in listed and unlisted equities and use a variety of trading tactics and leverages. According to the SEBI, the commitment raised by the category III stood at Rs 85,057 crore as of June 2023.
Here are the most popular smallcap stocks among the Category III long only funds asper Finalyca PMS Bazaar – an all-in-one investment analytics platform for PMS, AIF, MF & ULIP investments. Category III long only funds are either open ended or close ended funds managed like mutual fund schemes. They mostly invest in listed equities across large, mid and smallcap stocks. For this study, there are 61 Category III long only funds are considered. Source: Finalyca PMS Bazaar. Data as of September 29, 2023

Neuland Laboratories
No. of category III AIF long only funds holding the stock: 7
Sample of category III AIF long only funds holding the stock: Incred - India Value and Growth Fund I and Carnelian Capital Compounder Fund - 1

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Equitas Small Finance Bank
No. of category III AIF long only funds holding the stock: 5
Sample of category III AIF long only funds holding the stock: 360 One - High Growth Companies Fund and ICICI Prudential Growth Leaders Fund

Cyient
No. of category III AIF long only funds holding the stock: 4
Sample of category III AIF long only funds holding the stock: Girik Multicap Growth Equity Fund II and 360 One - Multi Strategy Fund

Dr Lal Pathlabs
No. of category III AIF long only funds holding the stock: 4
Sample of category III AIF long only funds holding the stock: Rising Giants – AIF and Edelweiss - Alternative Equity Scheme

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Jammu and Kashmir Bank
No. of category III AIF long only funds holding the stock: 4
Sample of category III AIF long only funds holding the stock: Oculus Capital - Growth Fund and White Oak - India Equity Fund II

Multi Commodity Exchange of India
No. of category III AIF long only funds holding the stock: 4
Sample of category III AIF long only funds holding the stock: Girik Multicap Growth Equity Fund II and Avendus Enhanced Return Fund Series - II

Laurus Labs
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Carnelian Structural Shift Fund and Emkay - Emerging Stars Fund I

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Kaynes Technology India
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: 360 One - High Conviction Fund and White Oak - India Equity Fund II

Garware Technical Fibres
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Karma Capital India Fund - Series 1 and White Oak - India Select Equity Fund

GMM Pfaudler
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Rising Giants – AIF and Edelweiss - Catalyst Opportunities Fund

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Healthcare Global Enterprises
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: 360 One - Multi Strategy Fund and Incred-Emerging Business Fund

Hitachi Energy India
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Girik Multicap Growth Equity Fund II and Karma Capital India Fund - Series 1

Igarashi Motors India
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Incred - India Value and Growth Fund I and Emkay - Emerging Stars Fund I

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eClerx Services
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Carnelian Structural Shift Fund and Edelweiss - Catalyst Opportunities Fund

Five-Star Business Finance
No. of category III AIF long only funds holding the stock: 3
Sample of category III AIF long only funds holding the stock: Girik Multicap Growth Equity Fund II and White Oak - India Equity Fund II

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