Carnelian Mutual Fund will launch its open-ended Carnelian Small Cap Fund on October 16, with the new fund offer (NFO) closing on October 30. The scheme will have an investment cap of ₹5,000 crore, according to the fund house.
The scheme aims to generate long-term capital appreciation by investing predominantly in equity and equity-related instruments of small-cap companies. It will be benchmarked against the Nifty Smallcap 250 Total Return Index (TRI).
The minimum investment during the NFO will be ₹500, followed by investments in multiples of ₹1. The scheme will offer Direct and Regular plans, with Growth and Income Distribution cum Capital Withdrawal (IDCW) options.
The fund will be managed by Deepak Malik and Viraj Parekh. Subscriptions and redemptions are scheduled to reopen on November 13, 2026, after the NFO period.
According to the fund house, the scheme plans to build a concentrated portfolio of around 30-50 companies from an initial universe of more than 1,000 stocks. Its investment process will combine quantitative screening, fundamental analysis and assessments of corporate governance, earnings quality, cash flows and valuations.
The fund house said it would use its proprietary CLEAR framework to examine factors including cash flows, liabilities, earnings quality, asset quality and related-party transactions. The process will also include ground-level assessments of company management and other business stakeholders.
Rajkumar Dhiman, CEO of Carnelian Mutual Fund, said the ₹5,000 crore cap was intended to maintain flexibility in portfolio construction as the scheme grows.
Small-cap funds invest predominantly in smaller companies and can be subject to higher price volatility and liquidity risks than funds investing in larger companies. Returns are not guaranteed, and investors should consider their risk appetite and investment horizon before investing.
NOTE TO READERS
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.