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Chandigarh: Bajaj Finserv Asset Management Company (AMC) has announced the launch of its new equity scheme — the Bajaj Finserv Small Cap Fund, an open-ended fund focused on small-cap stocks. The fund aims to offer investors a diversified exposure to smaller companies with high growth potential, quality financials, and attractive valuations.
The New Fund Offer (NFO) opens for subscription on June 27, 2025, and will close on July 11, 2025.
This latest offering comes at a time when the broader market has seen a notable correction in small-cap stocks, making them more appealing from a valuation standpoint. Bajaj Finserv AMC believes the current environment provides an ideal entry point for long-term investors aiming to capitalize on potential upside in the segment.
A Strategy Rooted in Growth, Quality, and Value
The Bajaj Finserv Small Cap Fund will follow a three-pronged investment strategy, targeting:
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Quality: Companies with strong fundamentals, sound governance, and robust balance sheets.
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Growth: Businesses that have the potential to expand revenues and profits consistently.
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Value: Stocks that are temporarily trading below their intrinsic value due to short-term market pressures or mispricing.
According to the AMC, this combination provides a balanced approach to investing in the inherently volatile small-cap space.
“Small caps have undergone a meaningful correction, creating a favourable valuation gap. Over 80% of small-cap companies reported a 38% rise in profits, yet many continue to trade 15–45% below their 52-week highs,” the company noted in a release.
Rigorous Stock Selection Process
The fund will employ a structured and forensic approach to stock selection. From a universe of more than 1,100 listed small-cap companies, the AMC plans to construct a portfolio of 40 to 100 stocks.
Key filters include:
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Exclusion of companies with weak governance practices.
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Avoidance of firms with inconsistent financial performance.
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Internal risk-based frameworks to assess business sustainability.
“Investors are increasingly looking for small-cap exposure that is not just aggressive but also mindful of quality and governance. Our process is designed to provide that balance,” the AMC said.
Leadership Views
Ganesh Mohan, Managing Director of Bajaj Finserv AMC, said the launch underscores the AMC’s confidence in the long-term prospects of India’s small-cap space.
“With the recent correction in small caps, we believe this NFO is well-timed to help investors participate in long-term wealth creation. Our strategy blends quality, value, and growth to identify scalable businesses with strong fundamentals,” Mohan said.
Nimesh Chandan, the fund’s Chief Investment Officer (CIO) and one of its equity managers, added that many fundamentally sound small-cap businesses are currently available at discounted valuations.
“Despite strong earnings, valuations remain attractive in the small-cap space. This fund will selectively invest in quality companies that we believe can deliver sustained growth and re-rating over time,” Chandan said.
Sorbh Gupta will co-manage the equity portion of the fund alongside Chandan, while Siddharth Chaudhary will oversee the debt portion.
Key Features of the Fund
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Benchmark: BSE 250 SmallCap Index TRI
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Fund Managers: Nimesh Chandan & Sorbh Gupta (Equity), Siddharth Chaudhary (Debt)
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Minimum Investment: ₹500
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Options: Growth and IDCW (Income Distribution cum Capital Withdrawal)
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Exit Load: 1% for redemptions within six months from the date of allotment
Existing Small Cap Exposure
Bajaj Finserv AMC already has experience managing small-cap exposure through its other funds. For instance, its Flexi Cap Fund has gradually increased its small-cap allocation — rising from 21.8% in January 2025 to 26% by May 2025, reflecting the AMC’s bullish stance on the segment.
Who Should Consider This Fund?
The Bajaj Finserv Small Cap Fund is best suited for long-term investors with a higher risk appetite who are looking to diversify their equity portfolio and tap into the growth potential of emerging businesses. Small-cap investing can be volatile in the short term but may offer substantial rewards over longer periods.
The AMC advises investors to assess their risk profile and consult with their financial advisers before making any investment decisions.
Disclaimer: Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
