Mutual Funds Double Down on 12 Smallcap Stocks; Two Deliver Double-Digit Gains in Two Months

Retail investors often track the moves of large institutional players, especially mutual funds (MFs), which invest based on thorough research and long-term perspectives. September 2025 shareholding data shows that MFs increased their stakes in nearly 380 listed companies compared with the June quarter. Their top five high-conviction holdings were Equitas Small Finance Bank, Multi Commodity Exchange of India, Gokaldas Exports, Awfis Space Solutions, and Medi Assist Healthcare Services, where fund houses own 33-43%.

However, the more interesting trend lies deeper. We highlight 12 stocks where MF holdings more than doubled quarter-on-quarter, each now having at least 1% MF ownership. Such sharp increases often signal renewed confidence and can precede a rebound or re-rating. Yet most of these stocks have posted negative returns since October, immediately after the September quarter ended. Still, three of the twelve stocks have risen over the past two months, with two delivering strong double-digit gains, early wins for institutional buyers. (Data Source: ACE Equity)

Sammaan Capital Mutual funds raised their stake to 11.44% in the September quarter, up from 0.42% in June. Despite this increased interest, the stock has declined 12% since the start of October, slipping to Rs 141 over just over two months.

Marathon Nextgen Realty Mutual funds increased their holding to 10.60% in the September quarter, up from 2.29% in June. Since October began, the stock has fallen 6% to Rs 553.

The India Cements Mutual fund ownership rose to 8.79% in September from 2.75% in June. Over just two months since October began, the stock has gained 8%, reaching Rs 414.

Thirumalai Chemicals Mutual funds lifted their stake to 8.11% in September from 0.73% in June. Since early October, the stock has dropped 23% to Rs 217.

Vintage Coffee & Beverages Mutual funds increased their holding to 5.18% in September, up from 2.32% in June. Since October began, the stock has rallied 11% to Rs 164.

Asahi India Glass Mutual fund stake rose to 4.89% in September from 1.71% in June. Since October began, the stock has surged 20% to Rs 1,028.

EPACK Durable Mutual fund holding climbed to 3.16% in September from 0.36% in June. Since the beginning of October, the stock has fallen 27% to Rs 254.

Tilaknagar Industries Mutual funds increased their stake to 2.41% in September from 0.99% in June. Since October began, the stock has edged down 2% to Rs 438.

Suven Life Sciences Mutual funds raised their stake to 2.24% in September from 0.98% in June. Since October began, the stock has risen 5% to Rs 525.

These moves by mutual funds suggest a strategic shift towards smallcap stocks, which could indicate potential growth opportunities and undervalued assets in the market. While the overall performance of these stocks has been mixed, the significant gains in a few highlight the potential for strong returns in the smallcap segment.