Nippon India Small-cap Fund’s Portfolio Shifts: Top Buys and Sells Since January 2024

The Nippon India Smallcap Fund, launched in September 2010, aims to generate long-term capital appreciation by predominantly investing in small-cap companies’ equities and related instruments. The fund, managed by Samir Rachh, also seeks to generate consistent returns through investments in debt and money market securities.

As of April 2024, the fund’s assets under management (AUM) had grown to Rs 50,422.8 crore from Rs 45,894 crore in January 2024, reflecting a 9.87% increase. The fund operates with an expense ratio of 1.47% and is benchmarked against the Nifty Smallcap 250 – TRI index. Its net asset value (NAV) stands at Rs 158.86, with a 52-week high of Rs 158.86 and a low of Rs 100.02. Over the past year, the fund has delivered a return of 32.15% and a compound annual growth rate (CAGR) of 25.45% over the past decade.

Key Increases in Holdings

Since January 2024, the fund has significantly increased its holdings in certain companies. The most notable increase was seen in Coal India Ltd, whose holding rose by 151.85% from 0.27% to 0.68% of the AUM. Century Plyboards (India) Ltd followed with a 141.67% increase, rising from 0.12% to 0.29%. Jindal Saw Ltd and Hitachi Energy India Ltd also saw substantial increases, with their holdings growing by 108.33% and 100%, respectively. Galaxy Surfactants Ltd experienced an 88.89% increase in its holding, moving from 0.18% to 0.34%.

Key Decreases in Holdings

Conversely, the fund has reduced its holdings in several companies. GlaxoSmithKline Pharmaceuticals Ltd saw the most significant decrease, with its holding falling by 69.23% from 0.13% to 0.04%. La Opala RG Ltd’s holding declined by 60%, from 0.15% to 0.06%. JM Financial Ltd and Apollo Tyres Ltd experienced decreases of 56.25% and 48%, respectively. Lastly, Pokarna Ltd saw its holding reduce by 46.15%, from 0.13% to 0.07%.

Complete Divestments

In April 2024, the fund decided to completely divest its holdings in several companies, including Tata Steel Limited, Apollo Hospitals Enterprise Limited, Shriram Finance Limited, United Spirits Limited, Cera Sanitaryware Limited, Navin Fluorine International Limited, Indian Renewable Energy Development Agency Limited, Tata Technologies Ltd, Concord Biotech Limited, Tarsons Products Limited, Laurus Labs Limited, Dalmia Bharat Limited, Tracxn Technologies Limited, Blue Jet Healthcare Ltd, Honasa Consumer Limited, Jio Financial Services Limited, Happy Forgings Limited, and Nazara Technologies Limited. This action signified a full divestment from these companies, removing them entirely from the fund’s investment portfolio.

New Positions

Simultaneously, the fund initiated fresh positions by purchasing stocks of Crompton Greaves Consumer Electricals Limited, Power Finance Corporation Limited, Sterlite Technologies Limited, Aavas Financiers Limited, City Union Bank Limited, and JNK India Limited in April 2024. These acquisitions marked the establishment of new holdings within the fund’s investment portfolio.

Sectoral Analysis and Trends

The data indicates a strategic shift towards specific sectors. The increased holdings in Coal India Ltd, Century Plyboards (India) Ltd, Jindal Saw Ltd, Hitachi Energy India Ltd, and Galaxy Surfactants Ltd suggest a growing interest in the energy, construction materials, industrials and manufacturing sector

On the other hand, the reduced holdings in GlaxoSmithKline Pharmaceuticals Ltd, La Opala RG Ltd, Apollo Tyres Ltd and Pokarna Ltd indicate a decreased focus on pharmaceuticals, luxury consumer, automotive and construction sectors.

The complete divestment from a range of companies across various sectors, including steel, finance, healthcare, and technology, indicates a significant restructuring of the fund’s portfolio. The initiation of new positions in companies like Crompton Greaves Consumer Electricals Limited and Power Finance Corporation Limited further underscores a strategic realignment towards sectors such as consumer electronics and financial services.

Investors following the fund’s performance should closely monitor these developments and their impact on the fund’s overall returns.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.