As Care PMS grows in AUM, we often get asked:
“Are you still comfortable investing in small-cap stocks, especially when they make up 80% of your portfolio?”
Here’s the real picture:
Yes, we’ve always had a high exposure to small-cap companies, but not microcaps. Our typical investee companies are industry leaders with an average market cap of ₹3,000–4,000 Cr.
Small-caps have actually been one of the key reasons behind our consistent outperformance over the past 14 years. We’ve always focused on businesses that were either undervalued or had superior growth potential, and that continues to hold true.
However, we’re not blind to valuations. Over the last few months, we’ve strategically brought down small-cap allocation to under 70%, especially as valuations ran up and the market turned volatile.
That said, we remain comfortable with small caps, as long as our key filters are met:
– Strong management quality
– Robust financials
– Long-term growth visibility
Our approach is long-term. We typically build positions gradually (in 2–3 lots), with a minimum 3% portfolio weight, as long as liquidity isn’t a constraint.
So yes, we’re big in AUM.
But we haven’t changed our DNA. We continue to back businesses we understand, believe in, and are willing to stay invested in.
