If you’ve ever wondered whether Systematic Investment Plans
(SIPs) really build wealth, here’s a story that’ll surprise you. One small step — investing just ₹10,000 every month — could’ve quietly turned into ₹1.45 crore today. And it happened through one of the most consistent mutual funds in India: Nippon India Small Cap Fund.
Let’s unpack how this fund managed to do it, what makes it stand out, and what you should know before joining the ride.
The Journey: From Small Steps to Big Results
When Nippon India Small Cap Fund launched back in September 2010, it wasn’t exactly a household name. But over the next 15 years, it proved something powerful — that long-term discipline beats short-term noise.
| Investment Type | Total Invested | Current Value | Annualised Return |
|---|---|---|---|
| Lump-sum (₹1 lakh in 2010) | ₹1,00,000 | ₹16,57,840 | 20.51% |
| SIP (₹10,000/month for 15 years) | ₹19,00,000 | ₹1,44,75,433 | 22.84% |
Why This Fund Outperformed Others
The Nippon India Small Cap Fund has been a clear leader among small-cap mutual funds for years. Here’s why:
- Strong long-term returns: Around 21% annualised on lump-sum and over 23% CAGR through SIPs.
- Steady performance across market cycles: The fund didn’t just shine in bull markets — it managed volatility well too.
- Massive investor trust: With an AUM of ₹66,136 crore (as of September 2025), it’s now the largest small-cap scheme from Nippon India.
- 5-star Value Research rating: That’s a clear signal of consistency and reliability.
And here’s the thing — while small-cap funds are riskier, this one’s shown what strong stock-picking and patience can do.
What Makes It Tick: The Strategy Behind the Success
The fund’s core goal is simple — find small companies that could become the next big names.
It invests primarily in businesses ranked below India’s top 250 listed firms by market cap — the hidden gems. These are often high-growth, relatively underpriced companies with the potential to become tomorrow’s mid-caps.
Some of the fund’s top holdings include:
| Top Stocks | Allocation |
|---|---|
| MCX | 2.18% |
| HDFC Bank | 1.91% |
| Kirloskar Brothers | 1.30% |
| Karur Vysya Bank | 1.22% |
| SBI | 1.20% |
| NLC India | 1.17% |
| Tube Investments | 1.17% |
| Zydus Wellness | 1.16% |
| Paradeep Phosphates | 1.13% |
| Apar Industries | 1.11% |
And the fund stays diversified across strong-performing sectors:
| Top Sectors | Allocation |
|---|---|
| Consumer Durables | 7.89% |
| Industrial Products | 6.73% |
| Auto Components | 6.50% |
| Banks | 6.38% |
| Electrical Equipment | 6.13% |
| Pharma & Biotech | 5.36% |
| Capital Markets | 4.95% |
| Chemicals | 3.84% |
| Finance | 3.63% |
| Healthcare | 3.60% |
Who Should Consider Investing
If you’re someone with a long-term goal — maybe retirement, your child’s education, or building wealth for financial freedom — this fund fits the bill.
But here’s the key: you need patience. Small-cap funds are volatile in the short term. The real reward comes when you give your money time to grow.
You can start small:
- Lump-sum investment: ₹5,000 minimum
- SIP: ₹100 per month
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