Mutual funds pour US$ 986 million in IPOs in Q2 FY26; small-cap bets stay strong
- IBEF
- November 12, 2025
India’s mutual fund industry ramped up its exposure to new-age and emerging companies in Q2 FY26, investing Rs. 8,752 crore (US$ 986 million) in recently listed firms, with a strong focus on small-cap Initial Public Listings (IPOs), according to a Ventura report. Of the 11 major IPOs backed by mutual funds, 10 were small-caps, underscoring fund managers’ conviction in scalable, high-growth businesses despite a volatile market. Anthem Biosciences was the only mid-cap among the top investments. Ventura also identified nine mid-caps likely to move into the large-cap category and six small-caps poised to graduate to mid-cap status in the upcoming Association of Mutual Funds in India (AMFI) classification, reaffirming sustained investor interest in the mid-small segment.
Domestic institutional investors (DIIs) infused Rs. 36,270 crore (US$ 4.09 billion), cushioning the market against global risk-off sentiment. Mutual funds also saw robust participation from retail investors, with Systematic Investment Plan (SIP) inflows hitting a record Rs. 29,361 crore (US$ 3.31 billion) per month in September 2025, up from Rs. 27,269 crore (US$ 3.07 billion) in June 2025. However, growth in small- and mid-cap assets under management (AUM) slowed sharply to 0.6% and 0.4%, respectively, from 20% and 17% in the previous quarter, following Securities and Exchange Board of India’s (SEBI) caution on overvaluation and market corrections. Despite this, strong SIP momentum, DII resilience, and continued bets on next-generation businesses reflect investor confidence in India’s innovation-led, long-term growth story.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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