Who's fairest of them all? In fund managers' mirror, both small & midcaps

Small and midcap stocks have surged in popularity recently, marking a substantial upswing. Their benchmark indices have shown remarkable resilience, surging by more than 40 per cent from their lows earlier this year in March. However, there is a burgeoning concern that the market might be approaching an overheated state, with stock prices of numerous companies seeming to detach from their underlying fundamentals.

In light of this backdrop, it becomes quite intriguing to closely watch the stocks that equity fund managers are either increasing or decreasing their exposure to. In the midcap segment, notable inflows from domestic mutual funds (MFs) have been directed towards information technology firm Coforge, wind turbine company Suzlon Energy, and the recently listed Concord Biotech.

Conversely, companies like Zee Entertainment Enterprises, LIC Housing Finance, and Escorts Kubota, all of which are currently trading near their 52-week highs, have experienced profit-taking from domestic funds.

Within the small-cap arena, SBFC Finance, INOX Wind, and SJS Enterprises have notably risen as the preferred choices, while VIP Industries, Campus Activewear, and MTAR Technologies have observed fund houses scaling back their exposure.

Remarkably, INOX Wind, BSE, and RPG Life Sciences have entered the landscape of equity MFs’ holdings, as reported by Nuvama Institutional Equities.