Franklin India Small Cap Fund Direct Growth Review 2026: NAV, Returns, Portfolio & Should You Invest?
- September 4, 2026
- Posted by: Chaitanya Auti
- Category: Mutual Funds
Franklin India Small Cap Fund Direct Growth Plan had a NAV of ₹207.3454 as of 08 Sep 2026 and manages ₹14,466 Cr. Its 1-year, 3-year and 5-year returns are 8.51%, 13.01% and 16.67%, and it is tagged as High Risk. Our view is that the fund fits investors who can stay patient through sharper swings and want a small-cap allocation with a long runway, rather than those looking for smooth near-term outcomes.
The return pattern is mixed in the near term but stronger over longer periods. The portfolio is spread across 77 disclosed holdings, with the top names including financials, industrials, healthcare, real estate and consumer-linked businesses. That mix can support upside, but it also means the fund may move unevenly when small-cap sentiment changes.
Quick facts
| Particular | Details |
|---|---|
| NAV | ₹207.3454 as of 08 Sep 2026 |
| AUM | ₹14,466 Cr |
| Expense Ratio | 0.9% |
| Launch Date | 01 Jan 2013 |
| Min SIP | ₹500 |
| Risk Category | High Risk |
| Benchmark | Nifty Small Cap |
| Fund Category | Equity |
| Exit Load | No exit load after holding period |
| Fund Managers | R. Janakiraman, Akhil Kalluri, Sandeep Manam |
The fund is managed by R. Janakiraman, Akhil Kalluri and Sandeep Manam.
Source data date: as of 08 Sep 2026
Performance
| Period | Fund return | Benchmark return |
|---|---|---|
| 1M | 0.1% | 0.99% |
| 3M | 7.26% | 9.13% |
| 1Y | 8.51% | 7.38% |
| 3Y | 13.01% | 15.46% |
| 5Y | 16.67% | 14.62% |
Recent behaviour has been uneven. Over 1 month and 3 months, the fund moved in a relatively narrow range, which suggests it did not participate as strongly as the benchmark in the latest stretch. The 3-month figure is still positive, but it trails the index over the same period, so the near-term picture is steadier than aggressive.
Over 1 year, the fund edges ahead of the benchmark, which tells us the recent twelve-month period has been better than the very short-term run. That improvement matters because it shows the fund can recover after weaker patches, but it still has not matched the benchmark over 3 years. In our view, that gap means the middle-term path has been less consistent than the broad small-cap index.
The longer view is more constructive. The 5-year return is ahead of the benchmark, which points to better compounding over a full market cycle. At the same time, the 3-year return is below the benchmark, so the longer story is not one of straight-line outperformance. Rather, the fund appears to have gone through periods of pressure and then rebuilt performance later.
That pattern matters for investors. The fund looks less suited to those who want tight benchmark tracking and more suited to those willing to accept variability in exchange for the possibility of stronger long-horizon compounding. The current return profile suggests resilience over five years, but also enough shorter-run fluctuation to require patience.
Source data date: as of 08 Sep 2026
Should you BUY or HOLD Franklin India Small Cap?
A fund’s past returns alone don’t tell you whether you should buy it today or continue holding it.
The right decision depends on factors such as your current allocation, purchase price, risk profile, investment horizon and the role this fund plays in your overall portfolio.
Already holding Franklin India Small Cap? Thinking of investing now?
Peer comparison
| Fund | 1Y return | 3Y return | 5Y return |
|---|---|---|---|
| Franklin India Small Cap Fund Direct Growth Plan | 8.51% | 13.01% | 16.67% |
| TRUSTMF Small Cap Fund Direct Growth Plan | 35.81% | Data not available | Data not available |
| Bank of India Small Cap Fund Direct Growth Plan | 28.72% | 22.1% | 20.86% |
| Union Small Cap Fund Direct Growth Plan | 26.58% | 17.85% | 18.19% |
| Motilal Oswal Small Cap Fund Direct Growth Plan | 26.38% | Data not available | Data not available |
| ITI Small Cap Fund Direct Growth Plan | 25.39% | 25.36% | 19.49% |
This assessment is prepared by Uniapps Investment Adviser Pvt. Ltd. under SEBI Registered Investment Adviser registration INA000017639. On 1-year returns, the fund trails several peers by a wide margin, so its recent stretch looks clearly softer than the strongest peer figures. Over 3 years, it is also behind the available peer numbers, which means the middle-term picture is less competitive than the better-performing funds in this set.
The 5-year picture is more balanced. The fund’s longer-term return is below some peers such as Bank of India Small Cap Fund Direct Growth Plan and Union Small Cap Fund Direct Growth Plan, but it remains ahead of others that have limited or unavailable longer-horizon figures. That combination tells us the short-term and longer-term comparisons do not say the same thing: recent returns look muted relative to peers, while the multi-year record is more workable than the latest one-year number alone suggests.
Source data date: as of 08 Sep 2026
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Portfolio: where your money goes
| Holding | Sector | Weight |
|---|---|---|
| Call, Cash & Other Assets | Cash & Cash Equivalents and Net Assets | 3.97% |
| Equitas Small Finance Bank Ltd | Bank | 2.5% |
| Kajaria Ceramics Ltd | Construction Materials | 2.32% |
| Kirloskar Oil Engines Ltd | Automobile & Ancillaries | 2.22% |
| Pine Labs Ltd | Domestic Equities | 2.18% |
| Brigade Enterprises Ltd | Realty | 2.13% |
| Eris Lifesciences Ltd | Healthcare | 2.09% |
| Hindustan Aeronautics Ltd | Capital Goods | 1.98% |
| Kalyan Jewellers India Ltd | Diamond & Jewellery | 1.89% |
| Syrma SGS Technology Ltd | Electricals | 1.83% |
The top 10 holdings account for approximately 23.11% of the portfolio.
To see all holdings, visit the Franklin India Small Cap Fund Direct Growth Plan page
The largest disclosed position is Call, Cash & Other Assets at 3.97%, so no single holding dominates the portfolio by itself. The next nine positions sit in a fairly tight band from 2.5% down to 1.83%, which suggests the visible core is spread across several medium-sized allocations rather than one very large bet.
Weight falls gradually from the first holding to the tenth, and that gentle drop may help reduce dependence on one name. At the same time, 23.11% across the top 10 holdings still leaves a long tail of smaller positions among 77 disclosed holdings, so the portfolio is likely to have influence from many companies rather than just the visible leaders.
That structure can be useful in a small-cap fund because it avoids excessive concentration in the headline positions, but it also means the wider book still matters. In our view, the combination of a moderate top-10 share and a long list of holdings points to a diversified small-cap approach, even though the underlying segment itself remains high risk.
Source data date: as of 08 Sep 2026
Who should invest
This fund suits investors with a high tolerance for volatility and a long investment horizon, ideally measured in years rather than months. The risk tag is High Risk, and the return pattern shows that short-term outcomes can lag the benchmark even when longer-horizon compounding improves.
The main trade-off is clear: you accept a bumpier path and weaker stretches against the possibility of better long-run gains. Because the fund has 77 disclosed holdings and no extreme concentration in the largest names, it offers breadth within the small-cap space, but it still depends on how the segment behaves. It is more appropriate for investors who can remain invested through uneven phases.
Tax and exit load
| Holding period | Tax rate | Description |
|---|---|---|
| Units held less than 1 year | 20% | Short-term capital gains tax |
| Units held more than 1 year | 12.5% | Long-term capital gains tax |
Exit load: No exit load after holding period.
Source data date: as of 08 Sep 2026
Frequently asked questions
What is the current NAV of Franklin India Small Cap Fund Direct Growth Plan?
The current NAV is ₹207.3454 as of 08 Sep 2026.
What are the fund’s 1-year, 3-year and 5-year returns?
The fund’s returns are 8.51% for 1 year, 13.01% for 3 years and 16.67% for 5 years.
How does the fund compare with the benchmark?
It is ahead of the benchmark over 1 year and 5 years, but behind it over 3 years and the latest shorter periods. That makes the track record uneven rather than uniformly stronger than the index.
How does it compare with peer small-cap funds?
Its recent 1-year return is lower than several peers in the comparison set, while its 5-year return is more mixed and sits below some peers with available long-term figures. The short-term and longer-term views do not point in the same direction.
What is the minimum SIP amount?
The minimum SIP amount is ₹500.
What risk level and portfolio style does the fund have?
The fund is tagged High Risk, and its top disclosed holdings are spread across sectors such as banking, construction materials, automobiles, healthcare, real estate and capital goods. The top 10 holdings account for 23.11% of the portfolio.
Bottom line
Franklin India Small Cap Fund Direct Growth Plan shows a mixed but usable record: the latest stretch is softer than some peer funds and the benchmark in the shorter periods, yet the 5-year figure remains ahead of the index. That tells us the fund’s performance has not been linear. Its High Risk profile and small-cap focus mean investors need patience, while the 77 disclosed holdings and moderate top-10 share suggest breadth rather than a few oversized bets.
Published on 9 September 2026 at 6:17 PM IST
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RIA disclosure
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. This review is prepared by Uniapps Investment Adviser Pvt. Ltd. (earlier known as Uniapps Global Research Pvt. Ltd.) under SEBI Registered Investment Adviser registration INA000017639 for general informational purposes and is not personalized investment advice.