With small-caps in action, Kalpataru Projects, Birlasoft attract investors

With the needle shifting to small-and mid-cap space, here are some stocks on fund managers' radar

Over the past two months, market action has shifted to the small-cap and mid-cap space, with their performance gauges outperforming the benchmark Nifty50.

Furthermore, investors are pouring more money into small-cap and mid-cap oriented schemes than those focused on large-caps. Given this backdrop, it is interesting to see which are the stocks in this space that are on domestic fund managers’ radar. According to the Mutual Fund (MF) Insights report compiled by Nuvama Alternative & Quantitative Research, Kalpataru Projects, Birlasoft and Astra Microwave were the top three small-cap buys by MFs in May. Manyavar, Coforge and Crompton Crompton Greaves Consumer, meanwhile, were among the most-bought companies in the mid-cap space. Going ahead as well, small-cap stocks will be in focus as domestic fund managers are currently sitting on a lot of dry powder, thanks to huge inflows. In May, small-caps saw record high inflows of Rs 3,330 crore, while the mid-caps saw inflows of Rs 1,200 crore. Last month, the Nifty Midcap 100 index rose 6.2 per cent, while the Nifty Smallcap 100 index added 5.1 per cent.

“Star categories – small-cap and mid-cap – continue to rake in maximum flows despite a strong rally in small-cap and mid-cap indices. This clearly indicates high-risk appetite and preference for small-/mid-caps over well-discovered names,” says Abhilash Pagaria, head, Nuvama Alternative & Quantitative Research.