The Baroda BNP Paribas Small Cap Fund will choose stocks from the bottom up, focusing on companies with strong fundamentals, quality business models, and strong management teams.
The new scheme from Baroda BNP Paribas Mutual Fund Baroda BNP Paribas Small Cap Fund raised Rs 1,103 crore during its new fund offer (NFO) period, indicating that the frenzied buying in smaller cap categories will continue.
The NFO for the Baroda BNP Paribas Small Cap Fund was open from October 6 to October 20, 2023. This is the seventh NFO issued by Baroda BNP Paribas Asset Management India Private Ltd since the merged entity was formed in March 2022.
Notably, Baroda BNP Paribas Mutual Fund is India’s 22nd largest asset management company (AMC), with Rs 31,260 crore in average assets under management (AUM) for the September quarter.
During the NFO period in May this year, AMC’s previous equity fund, Baroda BNP Paribas Value Fund, raised more than Rs 1,500 crore. During the NFO period of its multi-asset fund in December last year, the BNP Paribas Mutual Fund mobilized over Rs 1,230 crore AUM.
Regarding the new scheme
Baroda BNP Paribas Small Cap Fund is the 26th scheme in this category, with a market capitalization of Rs 1.98 lakh crore as of September 2023.
The fund invests more than 65 percent of its net assets in small-cap companies. The fund employs a bottom-up stock-picking strategy, emphasizing companies with strong fundamentals, quality business models, and strong management teams. The fund is sector-agnostic and seeks to build wealth for investors by investing in companies with the potential to become market leaders in the future.
Shiv Chanani, who has over 24 years of experience in the mid and small-cap space, will manage the fund. The fund’s benchmark will be the Nifty Small Cap 250 Total Return Index.
Suresh Soni, Chief Executive Officer, BNP Paribas Asset Management India Pvt Ltd, commented on NFO collections, saying, “The NFO has received widespread participation from many investors and distribution partners across cities and towns.” Even though the existing category AUM is relatively modest at Rs 1.98 trillion, small-cap funds are a growing category. We believe the Baroda BNP Paribas Small Cap Fund is an excellent choice for investors looking to build long-term wealth through the Indian equity market.”
Nippon India Small Cap Fund is the largest fund in the small-cap category, with a total AUM of more than Rs 37,000 crore.
Small-cap funds as a category have delivered returns of 24.43 percent, 34.75 percent, and 21.79 percent over one, three, and five years, respectively.
