While there are around 5000 (source: AMFI) listed companies in India, the top 100 large-cap companies account for ~63% of the total market capitalization of USD 5.5 Trillion. Small caps and mid caps are about USD 1 Trillion each (about 18% each) – quite large even by global standards
The investable universe of small caps has significantly expanded.
In 2019, the number of small caps with market capitalization of more than Rs. 2000 crore was about 290 – as on Nov-24 the number is ~790, an increase of ~3x.
The largest small cap used to be around Rs 8000 crore in market capitalization and as on Nov-24 it is around Rs 27,000 crore.
Further, over a 5 year time period there has been a ~34% growth in IPO (Initial Public Offer) launches seen in small cap space. This in tune has aided a ~30% increase of coverage by brokerage houses.
In many high-growth segments the options are exclusively or predominantly in small-caps or midcaps. For example there is no large cap stock in the hotel sector, consumer durables segment etc… There are only 2 large cap chemical stocks versus 60 in small cap, 2 real estate large cap stocks versus 30 in small cap. There are many such sectors where there are 10x the number of choices in small caps vs large cap. In fact there are 36 unique sectors present only in small cap segment.
Large cap indices are dominated by a few sectors—financials alone account for nearly 35%-40% of the weight. Similarly, mid-cap indices also have noticeable sectoral biases. In contrast, small-cap indices typically exhibit a more balanced sectoral distribution, reducing concentration risk for investors seeking diversification.
The small-cap segment offers unparalleled sector diversification, enabling exposure to industries that are less accessible through large and midcaps. This diversity not only provides a hedge against sector-specific risks but also opens doors to untapped growth opportunities in emerging sectors, making small caps an essential component of a well-rounded portfolio.
With this backdrop, we would like to share key pointers on Mirae Asset Smallcap Fund :-
New Thresholds :-
Small cap Market Segment increased by 4x ahead of Large caps and Midcaps.
500 to 1000 universe also grew by 5x
Beyond 500 – Sea of opportunities :-
Within Small Caps, sectoral market cap grew at 35% to 72% CAGR
Upgrades from Small Cap to Mid cap : 86 in 2020 to 2024 V/S 54 in 2010 to 2015
Growth in Market Caps :- New Listings + Improving free float leads to better Liquidity
Representation of maximum Industries and Sectors : Small caps represent Maximum no. of Industries i.e. 44 out of 51 ; Also represent 21 out of 21 sectors available as per AMFI Classification
come on guys you are the AMC that keeps upping the TER every few weeks with almost the same returns as any other AMC. Why would anyone of us invest in your funds ?