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Mutual Funds Retreat: 10 Smallcap Stocks See Stake Reduction After Two Quarters of Buying

Published: November 26, 2025 | Category: real estate news
Mutual Funds Retreat: 10 Smallcap Stocks See Stake Reduction After Two Quarters of Buying

An analysis of mutual fund (MF) shareholding trends in BSE small-cap stocks over the last four quarters reveals a notable shift. During the September 2025 quarter, mutual funds trimmed their holdings in 79 stocks, marking a reversal after two consecutive quarters of accumulation — from December 2024 to March 2025, and again from March 2025 to June 2025.

About 48 stocks from the list have delivered positive price returns in FY26 so far. In fact, eight stocks have seen their share prices rise more than 50%, with some gaining as much as 95% in FY26. However, it is equally important to note that not all stocks have shared this upside. We highlighted 10 stocks from the group that have declined by as much as 32% during FY26, underlining the growing divergence in performance within the broader market.

Mutual funds are considered informed investors, often basing their decisions on in-depth research and long-term fundamentals. Mutual fund buying typically boosts investor confidence, but if they reduce their stakes after a period of steady accumulation, it’s worth paying attention. (Data Source: ACE Equity)

1. Stanley Lifestyles MF holding declined to 20.26% in the September quarter from 20.37% in June 2025. Previous quarters: Dec 2024: 19.45% | Mar 2025: 19.94% | Jun 2025: 20.37%. Stock performance FY26: –32.63%

2. Kaveri Seed Company MF holding declined to 1.59% in the September quarter from 1.69% in June 2025. Previous quarters: Dec 2024: 0.83% | Mar 2025: 1.48% | Jun 2025: 1.69%. Stock performance FY26: –20.76%

3. Rain Industries MF holding declined to 4.29% in the September quarter from 4.57% in June 2025. Previous quarters: Dec 2024: 2.91% | Mar 2025: 3.92% | Jun 2025: 4.57%. Stock performance FY26: –18.58%

4. Patel Engineering MF holding declined to 0.43% in the September quarter from 0.48% in June 2025. Previous quarters: Dec 2024: 0.32% | Mar 2025: 0.36% | Jun 2025: 0.48%. Stock performance FY26: –18.32%

5. Alivus Life Sciences MF holding declined to 3.87% in the September quarter from 4.06% in June 2025. Previous quarters: Dec 2024: 3.23% | Mar 2025: 3.59% | Jun 2025: 4.06%. Stock performance FY26: –18.01%

6. Balrampur Chini Mills MF holding declined to 25.40% in the September quarter from 26.09% in June 2025. Previous quarters: Dec 2024: 24.93% | Mar 2025: 25.60% | Jun 2025: 26.09%. Stock performance FY26: –17.94%

7. Bansal Wire Industries MF holding declined to 11.91% in the September quarter from 12.06% in June 2025. Previous quarters: Dec 2024: 11.46% | Mar 2025: 11.80% | Jun 2025: 12.06%. Stock performance FY26: –17.51%

8. NCC MF holding declined to 14.34% in the September quarter from 15.23% in June 2025. Previous quarters: Dec 2024: 11.98% | Mar 2025: 13.23% | Jun 2025: 15.23%. Stock performance FY26: –17.28%

9. JTLIndustries MF holding declined to 1.92% in the September quarter from 3.08% in June 2025. Previous quarters: Dec 2024: 2.22% | Mar 2025: 2.76% | Jun 2025: 3.08%. Stock performance FY26: –16.61%

The reduction in mutual fund stakes in these smallcap stocks could signal a shift in investment strategies, possibly driven by market conditions, economic indicators, or company-specific factors. Investors should closely monitor these trends and the underlying reasons behind the changes to make informed decisions.

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Frequently Asked Questions

1. What is the significance of mutual funds trimming their holdings in smallcap stocks?
Mutual funds are considered informed investors. When they trim their holdings, it can signal a shift in market sentiment or a reassessment of the underlying fundamentals of the stocks. This can impact investor confidence and stock prices.
2. How many stocks have seen positive returns in FY26?
About 48 stocks from the list have delivered positive price returns in FY26 so far, with eight stocks seeing their share prices rise more than 50%.
3. Which stocks have seen the most decline in FY26?
Stocks like Stanley Lifestyles, Kaveri Seed Company, and Rain Industries have seen significant declines, with Stanley Lifestyles declining by 32.63% in FY26.
4. What factors might be influencing these changes in mutual fund holdings?
Several factors could be influencing these changes, including market conditions, economic indicators, company-specific performance, and broader investment strategies.
5. How should individual investors interpret these trends?
Individual investors should closely monitor these trends and the underlying reasons behind the changes. It’s important to stay informed and consider multiple factors before making investment decisions.