Turn ₹8,000 Monthly SIP into ₹1 Crore! Nippon India Small Cap Fund's Stunning Wealth Creation Revealed

Nippon India Small Cap Fund Delivers Phenomenal Long-Term Returns

Nippon India Small Cap Fund is making waves for its outstanding long-term performance, demonstrating its power to create significant wealth for investors. Data shows that a consistent monthly Systematic Investment Plan (SIP) of just ₹8,000, started around 15 years ago, has now grown to a fund value nearing ₹1 crore. This highlights the remarkable effect of compounding over time.

Stellar Performance Across Timeframes

The fund, launched on September 16, 2010, by Nippon India Mutual Fund, has exhibited strong performance not only through SIPs but also for lump-sum investments. Its ability to generate attractive gains across 3, 5, 10, and 15-year periods reflects steady fund management and a robust strategy.

• Lump Sum Investors: Annualized returns (CAGR) have been impressive, with 5-year returns reaching 30.02% (Direct Plan) and 10-year returns touching 21.02% (Direct Plan).
• SIP Investors: Annualized SIP returns (CAGR) have also been robust, with 7-year returns hitting 26.66% (Direct Plan) and 10-year returns at 23.25% (Direct Plan).
• A monthly SIP of ₹8,000 over 15 years, totaling an investment of ₹14.40 lakh, has grown to ₹99,50,832 in the Regular Plan, nearing the ₹1 crore mark.

Investment Strategy and Portfolio

Fund managers focus on identifying small-cap companies with strong growth potential, aiming for them to evolve into mid-cap entities over the long run. This strategy has been key to generating superior returns.

• Small-cap stocks are defined as companies ranked 251st and beyond by market capitalization.
• The fund's top sectors include Consumer Durables (7.97%), Banks (6.90%), Industrial Products (6.44%), Electrical Equipment (6.35%), and Auto Components (6.09%).
• Key holdings feature MCX (2.48%), HDFC Bank (1.90%), SBI (1.41%), Karur Vysya Bank (1.34%), and Kirloskar Brothers (1.22%).

Risk and Expenses

Nippon India Small Cap Fund is classified under 'Very High Risk' on its riskometer, acknowledging the inherent volatility associated with small-cap investments.

• The expense ratio is 1.39% for the Regular Plan and 0.63% for the Direct Plan.
• As of December 1, 2025, the fund's Assets Under Management (AUM) stood at ₹68,548 crore, making it the largest in the Indian small-cap category.

Investor Considerations

While past performance is strong, it is not a guarantee of future results. Investors should carefully consider their risk appetite, as small-cap funds are more volatile than large-cap or mid-cap schemes.

• Experts recommend that small-cap exposure should not exceed 20-25% of an equity portfolio.
• A minimum investment horizon of 5 years or longer is generally advised for this category.

Impact

This news has a significant positive impact on investors in the Nippon India Small Cap Fund and serves as a strong case study for the potential of long-term SIP investing in small-cap equity funds in India. It reinforces the appeal of compounding and disciplined investment. Impact Rating: 8/10.

Difficult Terms Explained

• Systematic Investment Plan (SIP): A method of investing a fixed amount of money into mutual funds at regular intervals (usually monthly).
• Assets Under Management (AUM): The total market value of all assets managed by a mutual fund company.
• Compound Annual Growth Rate (CAGR): The average annual growth rate of an investment over a specified period longer than one year.
• Expense Ratio: The annual fee charged by a mutual fund to cover its operating expenses.
• Small-cap Stocks: Stocks of companies with a relatively small market capitalization, typically ranked 251st and below by market cap.
• Market Capitalisation: The total market value of a company's outstanding shares of stock.
• Riskometer: A tool used by mutual funds to indicate the risk level associated with an investment scheme.