The fund house had earlier limited lump-sum inflows amid concerns around deploying large sums efficiently in relatively illiquid small-cap stocks. The latest move, effective prospectively, has been incorporated into the scheme’s official documents, including the Scheme Information Document and Key Information Memorandum.
According to the fund house, the decision comes in the backdrop of a correction in small-cap stocks, which has eased valuation pressures across the segment. This has improved the availability of investment opportunities at relatively lower price levels.
Anand Vardarajan, Chief Business Officer at Tata Asset Management, said the resumption reflects improved visibility on deploying capital and identifying companies with relatively stronger fundamentals. He added that volatility remains a characteristic of the small-cap space, but recent market movements have created more reasonable entry points for long-term investors.
The reopening allows investors to make lump-sum allocations to the fund, which primarily follows a bottom-up stock selection approach focused on smaller companies.
Other features of the scheme, including its risk classification, remain unchanged. As with all equity mutual funds, the small-cap category is subject to higher volatility and liquidity risks compared to large-cap or diversified funds. Investors are typically advised to assess their risk appetite and investment horizon before allocating to such segments.
