{"id":21622,"date":"2026-02-19T10:27:22","date_gmt":"2026-02-19T04:57:22","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=21622"},"modified":"2026-02-19T10:27:22","modified_gmt":"2026-02-19T04:57:22","slug":"smallcap-beats-93p-buys-internet-stocks","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/smallcap-beats-93p-buys-internet-stocks\/","title":{"rendered":"India\u2019s Best-Performing Smallcap Funds Beat 93% of Peers \u2014 Smart Contrarian Bet or Risky Trap?"},"content":{"rendered":"

At a time when Indian smallcaps are struggling for direction<\/strong>, one fund has quietly outperformed 93% of its peers by doing the exact opposite of the crowd<\/strong>.<\/p>\n

The Bandhan Small Cap Fund<\/strong>, which manages $2.1 billion (~\u20b917,500 crore)<\/strong>, is now aggressively accumulating beaten-down internet and digital platform stocks like Paytm, Info Edge, and IndiaMART<\/strong>, betting that extreme pessimism is creating deep-value opportunities<\/strong> in India\u2019s tech ecosystem.<\/p>\n

This bold strategy comes even as the Nifty Smallcap 100 index remains under pressure<\/strong>, down ~2.7% YTD<\/strong>, reflecting broader risk aversion across mid- & small-cap segments.<\/p>\n

What Exactly Is The Fund Buying?<\/h2>\n

According to disclosures and interviews, the fund has added sizeable exposure to:<\/strong><\/p>\n

\n
\n\n\n\n\n\n\n\n
Stock<\/th>\nTheme<\/th>\nWhy It Matters<\/th>\n<\/tr>\n<\/thead>\n
Paytm<\/a> (One97)<\/strong><\/td>\nFintech turnaround<\/td>\nImproving profitability and BNPL optionality<\/td>\n<\/tr>\n
Info Edge<\/strong><\/td>\nDigital platforms<\/td>\nValuation reset + Zomato, policybazaar exposure<\/td>\n<\/tr>\n
IndiaMART<\/strong><\/td>\nB2B e-commerce<\/td>\nMarket leadership + operating leverage<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n

The fund added ~1.6 million Paytm shares in January<\/strong>, signalling high conviction despite regulatory and earnings uncertainty<\/strong>.<\/p>\n

Fund Manager\u2019s Core Thesis\u2014Deep Value + High Asymmetry<\/h2>\n

Manish Gunwani, CIO (Equities) at Bandhan AMC<\/a>, sums up the strategy:<\/p>\n

\n

\u201cWe are comfortable buying unpopular value stocks as long as there is probability for them to double.\u201d<\/em><\/p>\n<\/blockquote>\n

Translation for traders:<\/h3>\n

The fund is hunting asymmetric risk-reward setups in<\/strong>\u00a0stocks where bad news is priced in<\/strong>, but future optionality is not.<\/strong><\/p>\n

This contrarian accumulation phase<\/strong> typically appears near medium-term bottoms<\/strong>, especially in:<\/p>\n

    \n
  • \n

    beaten-down tech<\/p>\n<\/li>\n

  • \n

    regulatory-stressed fintech<\/p>\n<\/li>\n

  • \n

    cyclically weak sectors<\/p>\n<\/li>\n<\/ul>\n

    Market Context: Why This Move Is Contrarian<\/h2>\n
    \n
    \n\n\n\n\n\n\n\n
    Index<\/th>\n2026 YTD Performance<\/th>\n<\/tr>\n<\/thead>\n
    Nifty 50<\/strong><\/td>\n~Flat to slightly positive<\/td>\n<\/tr>\n
    Nifty Smallcap 100<\/strong><\/td>\n\u20132.7%<\/strong><\/td>\n<\/tr>\n
    MSCI Asia-Pac<\/strong><\/td>\n+11%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n

    Despite global equity strength, Indian smallcaps remain under pressure<\/strong>, creating valuation pockets rarely seen outside corrections<\/strong>.<\/p>\n

    Sector Rotation Signals Emerging<\/h2>\n

    Beyond internet stocks, the fund is overweight in:<\/strong><\/p>\n

      \n
    • \n

      Financial Services<\/strong><\/p>\n<\/li>\n

    • \n

      Real Estate<\/strong><\/p>\n<\/li>\n

    • \n

      Textiles<\/strong><\/p>\n<\/li>\n

    • \n

      Renewables<\/strong><\/p>\n<\/li>\n<\/ul>\n

      It has also trimmed metal exposure<\/strong>, suggesting a clear macro rotation bet<\/strong>.<\/p>\n

      A custom textile basket has already rallied 15%+ after India-US trade deal news<\/strong>, validating the fund\u2019s early positioning.<\/p>\n

      Why This Matters Today (Trader + Investor Angle)<\/h2>\n

      This move sends three high-signal market messages<\/strong>:<\/p>\n

      1. Smart Money Is Buying Fear<\/h3>\n

      When top-quartile funds buy stocks hated by the market<\/strong>, it often marks accumulation zones<\/strong>, not distribution.<\/p>\n

      2. Internet Stocks Are Entering Deep-Value Phase<\/h3>\n

      After brutal corrections, fintech and digital\u00a0platform stocks are shifting from momentum to value plays<\/strong>.<\/p>\n

      3. Smallcap Rotation May Be Building<\/h3>\n

      Persistent institutional accumulation often precedes sector-level trend reversals<\/strong>, especially after prolonged underperformance.<\/p>\n

      Tactical Market Insight\u2014How Traders Can Use This<\/h2>\n
      \n
      \n\n\n\n\n\n\n\n
      Strategy<\/th>\nHow To Apply<\/th>\n<\/tr>\n<\/thead>\n
      Swing Traders<\/strong><\/td>\nTrack Paytm + Info Edge breakout levels<\/strong> for positional trades<\/td>\n<\/tr>\n
      Positional Traders<\/strong><\/td>\nLook for base breakouts in quality internet and textile names<\/strong><\/td>\n<\/tr>\n
      Long-Term Investors<\/strong><\/td>\nUse staggered SIP\/phased entries<\/strong> instead of lump sum<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n

      Key Risks To Watch<\/h2>\n
        \n
      • \n

        Regulatory surprises (especially fintech)<\/p>\n<\/li>\n

      • \n

        Earnings volatility in platform businesses<\/p>\n<\/li>\n

      • \n

        Broader risk-off sentiment in global markets<\/p>\n<\/li>\n

      • \n

        Smallcap liquidity crunch during corrections<\/p>\n<\/li>\n<\/ul>\n

        FAQ<\/h2>\n

        Q1. Why is this fund buying Paytm despite weak stock performance?<\/strong>
        Because profitability trends are improving and regulatory overhang is easing, creating deep-value opportunity.<\/p>\n

        Q2. Is this strategy risky?<\/strong>
        Yes. Deep-value strategies involve volatility but offer high reward asymmetry<\/strong> when timing aligns.<\/p>\n

        Q3. Does this signal a turnaround in internet stocks?<\/strong>
        Early institutional accumulation often precedes sector recoveries<\/strong>, but confirmation requires price breakout.<\/p>\n

        Q4. Should retail investors copy this strategy?<\/strong>
        Retail investors should use SIP and staggered buying<\/strong>, not aggressive lump-sum entries.<\/p>\n","protected":false},"excerpt":{"rendered":"

        At a time when Indian smallcaps are struggling for direction, one fund has quietly outperformed 93% of its peers by doing the exact opposite of the crowd. The Bandhan Small Cap Fund, which manages $2.1 billion (~\u20b917,500 crore), is now aggressively accumulating beaten-down internet and digital platform stocks like Paytm, Info Edge, and IndiaMART, betting […]<\/p>\n","protected":false},"author":11,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[],"ppma_author":[1523],"class_list":{"0":"post-21622","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":1523,"user_id":11,"is_guest":0,"slug":"nikki","display_name":"Nikki Lodha","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/ae2e265bd56e0e890c866fbaa55d29846ba20cc5372adf666652268816af117e?s=96&d=mm&r=g","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/21622","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=21622"}],"version-history":[{"count":1,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/21622\/revisions"}],"predecessor-version":[{"id":21624,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/21622\/revisions\/21624"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/21623"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=21622"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=21622"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=21622"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=21622"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}