NEW DELHI: India’s top asset management companies (AMCs) will take up to 60 days to liquidate 50% of their holding in small-cap schemes in case of a sudden redemption, according to results from stress tests conducted by fund houses.
For mid-cap schemes, the fund managers would take up to 34 days to offload 50% of their holding. However, a vast number of AMCs will take less than 10 days to liquidate 50% of the stocks in mid-cap as well as small-cap schemes.
SBI Small Cap Fund would require a maximum 60-day period to offload 50% and 30 days to offload 25% of the holding. The fund, whose AUM stood at Rs 25,534 crore as of February 2024, allows SIPs up to Rs 25,000 per month per investor, with no lump sum restrictions.
Nippon India Small Cap Fund, the largest in the segment with an AUM of Rs 46,004 crore would need 27 days to liquidate half of its portfolio and 13 days for 25%. HDFC Small Cap, the second-largest small cap fund with an AUM of Rs 28,599 crore, would need 42 days for 50% and 21 days for a quarter of its portfolio.
Among midcap funds, Kotak Emerging Equity Fund, which manages a Rs 39,732 crore portfolio, would require 34 days to liquidate 50% and 17 days to offload a quarter of its fund. Nippon India Growth Fund (AUM : Rs 24,494 crore) would take 7 days for 50% of its fund and 4 days for 25% of its fund. HDFC Mid-Cap Opportunities Fund (AUM: Rs 60,194 crore) would require 23 days to sell 50% of the stock in the fund and 12 days to sell 25% of the holding.
The first set of stress test results on Friday comes after the Association of Mutual Funds in India (AMFI) aksed mutual funds to conduct stress tests and publish results once in every 15 days. AMFI’s direction came after SEBI’s concern that a froth is building in mid-cap and small-cap segments.