Nippon India Small Cap Fund — Deep Analysis, NAV, Returns, Risk

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Fund Overview

Nippon India Small Cap Fund — Quick Summary

Nippon India Small Cap Fund is one of India's oldest and most respected small cap mutual funds, launched in September 2009. Managed by R. Srinivasan, Head of Equities at SBI Mutual Fund, it has built a stellar 15-year track record by investing in quality small cap businesses ranked 251st and beyond by market capitalisation as defined by SEBI.

Fund House

Nippon India Mutual Fund

✓ Suitable For

✓Investors with 7+ year horizon who can stay patient through crashes

✓SIP investors doing rupee cost averaging every month without stopping

✓Those seeking high wealth creation and comfortable with high volatility

✓Experienced investors using this as a satellite allocation — max 15–20% of portfolio

✗ Not Suitable For

✗Investors concerned about large AUM risk — at ₹65,000+ Cr, exits can be slow

✗Anyone who needs money within 3–5 years — small caps can be down for years

✗Investors who panic sell — 40–50% crashes are normal in this category

✗Those making it their only fund — concentration in small caps is dangerous

Who Runs This Fund

Fund Manager

SM

Sailesh Raj Bhan

Deputy CIO – Equity, Nippon India MF

Managing Since

2013

Experience

25+ Years

Funds Managed

4 Funds

Total AUM

₹45,000 Cr+

Known for his bottom-up stock picking approach and patience with small cap positions. Has navigated the fund through multiple market cycles including the 2018 NBFC crisis and 2020 COVID crash.

Fund History

Key Moments in Fund's Life

January 2010

🚀 Fund Launch

Nippon India (then Reliance) Small Cap Fund launched with a modest NFO. The small cap category was largely ignored by mainstream investors at the time.

2012 — 2017

📈 The Golden Run

The fund delivered extraordinary returns during the small cap bull run. AUM grew from a few hundred crore to over ₹5,000 Cr. Sailesh Raj Bhan's bottom-up approach of finding hidden gems in small cap space paid off handsomely.

2018 — 2019

📉 NBFC Crisis

The NBFC crisis and IL&FS collapse hammered small caps. Many portfolio companies saw 40–60% declines. Investors who entered at 2017–18 peaks faced severe drawdowns.

March 2020

💥 COVID Crash

The fund lost ~40% in weeks during COVID panic. Redemption pressure was intense. Many investors panicked and sold, only to miss the extraordinary recovery.

2021 — 2022

🏆 Spectacular Recovery

Post-COVID recovery was exceptional. The fund delivered 100%+ returns from March 2020 lows. AUM surged as retail investors poured in, chasing returns.

2023 — 2024

👑 India's Largest Small Cap Fund

AUM crossed ₹50,000 Cr, then ₹65,000 Cr — making it the largest small cap fund in India by a wide margin. This milestone raised both admiration and questions about manageability.

2025 — Present

⚖️ The Size Dilemma

At ₹65,000+ Cr, the fund now holds positions in hundreds of small cap stocks. Deploying and exiting positions at this scale is a genuine challenge. SEBI and analysts have flagged large AUM as a risk for small cap funds.

What They Don't Tell You

The Dark Chapters

Every fund has painful periods. Here's an honest look at when Nippon India Small Cap struggled — because understanding this is crucial before investing.

2018 — 2020 · 26 Months

The NBFC Nightmare

The NBFC and IL&FS crisis triggered a brutal small cap bear market. Nippon India Small Cap fell over 45% from its 2018 peak. Thousands of investors who had entered during the 2017 bull run were sitting on massive losses for over 2 years. The recovery felt painfully slow.

Peak to trough: ~45% decline

March 2020 · 6 Weeks

COVID Freefall

In 6 weeks, the fund lost approximately 40% as COVID fears shut global markets. Investors who had barely recovered from the 2018 crash saw their portfolios crater again. The fund's large number of illiquid small cap positions made it difficult to manage redemptions without impacting NAV.

~40% drop in 6 weeks

2023 — 2024 · Ongoing

The AUM Trap — Can ₹65,000 Cr Be Deployed Well?

When a small cap fund reaches ₹65,000+ Cr, finding enough quality small cap stocks to invest in becomes a genuine challenge. The fund now holds 100+ stocks, some of which are borderline mid-cap in size. Critics argue the fund's character has changed — it is no longer a pure small cap fund in the truest sense.

AUM risk: Structural concern

Structural Risk · Always Present

Redemption Pressure in Crashes

With India's largest AUM in small caps, if a market crash triggers simultaneous redemptions, the fund manager must sell holdings at whatever price the market offers. Small cap stocks are illiquid — large sell orders move prices. This "redemption cascade" risk is real and underdiscussed.

Risk: High in sharp market falls

⚠️ Educational Disclaimer: The dark chapters above are presented for educational awareness only. Past difficulties do not predict future performance. RightAdvise.com is NOT a SEBI/AMFI registered advisor. Please consult a qualified financial advisor before investing.

Performance

Returns vs Benchmark

1 Month

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Nifty SC: —

3 Month

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Nifty SC: —

6 Month

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Nifty SC: —

1 Year

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Nifty SC: —

3 Year CAGR

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Nifty SC: —

5 Year CAGR

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Nifty SC: —

10 Year CAGR

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Nifty SC: —

Since Inception

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Sep 2009

Price History

NAV History

Consistency Analysis

Rolling Returns ℹ️ What is this?

Rolling returns show how the fund performed across every possible investment period — not just one cherry-picked date. This reveals true consistency. Learn more →

1Y Rolling (Avg)

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% of times positive: —

3Y Rolling (Avg)

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% of times positive: —

5Y Rolling (Avg)

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% of times positive: —

1-Year Rolling Returns Each point = 1yr return from that date

Risk Analysis

Maximum Drawdown ℹ️ What is this?

Drawdown shows the biggest fall from peak NAV. This is what investors actually experience during market crashes. Learn more →

Max Drawdown Ever

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Recovery time: —

2020 Covid Crash

-40.2%

Recovery: 14 months

2018 IL&FS Crisis

-28.6%

Recovery: 24 months

Current from Peak

—

Peak NAV: —

Drawdown Chart % fall from rolling peak NAV

Valuation Signal

NAV vs 200-Day Moving Average

When NAV is above 200 DMA, the fund is in an uptrend. When below, it signals caution. Many investors use this as a simple entry/exit signal.

Current NAV

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200 DMA

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NAV vs DMA

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Loading signal...

NAV vs 200 DMA

Risk Metrics

Risk Ratios

Alpha (3Y)

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Excess return over benchmark. Higher is better.

Beta (3Y)

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Volatility vs market. >1 means more volatile.

Sharpe Ratio

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Return per unit of risk. >1 is considered good.

Sortino Ratio

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Like Sharpe but only penalises downside risk.

Std Deviation

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How much returns fluctuate. Lower = more stable.

R-Squared

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How closely it tracks the benchmark index.

Benchmark Comparison

Fund vs Nifty Smallcap 250

₹1 Lakh invested — Growth comparison

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