Nippon India Small Cap Fund Direct Growth Review 2026: NAV, Returns, Portfolio & Should You Invest?

Nippon India Small Cap Fund Direct Growth Plan had a NAV of ₹209.9409 as of 24 August 2026 and an AUM of ₹77,864 Cr. Its 1-year, 3-year and 5-year returns are 10.7137%, 17.7359% and 21.0604%, and the fund carries a High Risk label.

Our view is that this is a small-cap option suited to investors who can handle sharp swings in pursuit of long-term compounding. The portfolio is heavily tilted toward small caps, and the recent return profile has been weaker than its longer-run 3-year and 5-year record, which makes patience more important than short-term expectations.

Quick facts

Metric	Value
NAV	₹209.9409
AUM	₹77,864 Cr
Expense Ratio	0.63%
Launch Date	01 January 2013
Min SIP	₹100
Risk Category	High Risk
Benchmark	Nifty Small Cap
Fund Category	Equity
Exit Load	1% if units are sold within 1 year; nil after 1 year
Fund Managers	Samir Rachh

The fund is managed by Samir Rachh.

Source data date: as of 24 Aug 2026

Performance

Period	Fund return	Benchmark return
1M	3.77%	3.09%
3M	6.86%	7.44%
1Y	10.71%	11.32%
3Y	17.74%	14.34%
5Y	21.06%	15.72%

The recent pattern is mixed rather than uniformly strong. Over 1 month, the fund stayed ahead of the benchmark, but over 3 months and 1 year it trailed the benchmark slightly, which tells us the last stretch has not been a smooth outperformance phase.

The longer record is more convincing. The 3-year and 5-year returns are both ahead of the benchmark, and that gap suggests the fund has compounded better across a full market cycle than the index it tracks against here. For a small-cap fund, that long-run edge matters more than a single quarter or one-year reading.

The daily pattern also points to volatility, with short bursts of weakness followed by recovery. That is consistent with a small-cap portfolio and helps explain why the short-term numbers can move around even when the longer-term record remains constructive.

Our view is that the key question is not whether the fund can lag in a shorter window; it clearly can. The more relevant test is whether an investor can stay invested long enough for the 3-year and 5-year compounding pattern to matter. On that measure, the fund has a stronger track record than the latest one-year figure alone suggests.

Source data date: as of 24 Aug 2026

Should you BUY or HOLD Nippon 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.

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Peer comparison

Fund	1Y return	3Y return	5Y return
Nippon India Small Cap Fund Direct Growth Plan	10.71%	17.74%	21.06%
TRUSTMF Small Cap Fund Direct Growth Plan	32.68%	Data not available	Data not available
Bank of India Small Cap Fund Direct Growth Plan	27.45%	23.71%	21.88%
Motilal Oswal Small Cap Fund Direct Growth Plan	23.98%	Data not available	Data not available
Union Small Cap Fund Direct Growth Plan	23.69%	19.84%	19.24%
ITI Small Cap Fund Direct Growth Plan	21.78%	26.65%	20.59%

This assessment is prepared by Uniapps Investment Adviser Pvt. Ltd. under SEBI Registered Investment Adviser registration INA000017639.

On 1-year performance, the fund trails several peers that have posted stronger recent gains, so the latest stretch has been ordinary rather than standout. The picture improves on longer periods: its 3-year and 5-year returns are ahead of some peers with available data, although others have done better over the same horizons. That split matters because it shows the fund has been steadier over the medium to long term than the most recent year alone suggests.

So the peer comparison tells two different stories. In the short run, the fund has not matched the faster recent pace of the stronger names in the group. In the longer run, it remains competitive and avoids looking like a one-period story.

Source data date: as of 24 Aug 2026

Portfolio: where your money goes

Market-cap bucket	Allocation
Large cap	12.29%
Mid cap	13.58%
Small cap	68.96%
Other	5.17%

Sector	Weight	Key holdings
CAPITAL GOODS	26.71%	KIRLOSKAR PNEUMATIC COMPANY LIMITED (6.03%), KIRLOSKAR PNEUMATIC CO.LTD (5.33%)
FINANCE	10.68%	MULTI COMMODITY EXCHANGE OF INDIA LIMITED (7.68%)
IT	7.44%	ECLERX SERVICES LIMITED (4.83%)
HEALTHCARE	6.46%	THYROCARE TECHNOLOGIES LIMITED (0.91%), METROPOLIS HEALTHCARE LIMITED (0.81%)
BANK	5.22%	HDFC BANK LIMITED (1.26%), KARUR VYSYA BANK LIMITED (0.91%)

The portfolio is clearly built around small-cap exposure, with 68.96% in small caps and only 12.29% in large caps. That mix supports higher return potential, but it also helps explain why the fund can move more sharply than a broader-market equity option.

CAPITAL GOODS is the largest sector at 26.71%, which is materially larger than the next sector weights of Finance at 10.68% and IT at 7.44%. That makes the portfolio more dependent on how a single sector theme behaves, even though the remaining exposure is spread across several other areas.

In our view, CAPITAL GOODS is likely to have the greatest influence on portfolio behaviour because it is the largest sector by a wide margin and also contains the heaviest individual holdings. Finance can also matter, but the sector gap means the capital-goods sleeve should have the stronger impact on near-term swings.

Source data date: as of 24 Aug 2026

Who should invest

This fund fits investors who can accept a High Risk profile and stay invested through uneven short-term periods. The one-year return has been weaker than the 3-year and 5-year record, so the main requirement is a long enough horizon to let the longer compounding pattern work.

The fund may suit someone looking for a small-cap allocation rather than a core low-volatility holding. The trade-off is straightforward: you get meaningful exposure to small caps and the possibility of stronger long-run gains, but you must be comfortable with sharper drawdowns and a benchmark that can beat it in shorter windows.

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: 1% if units are sold within 1 year; nil after 1 year.

Source data date: as of 24 Aug 2026

Frequently asked questions

What is the current NAV of Nippon India Small Cap Fund Direct Growth Plan?

The current NAV is ₹209.9409 as of 24 August 2026.

What are the 1-year, 3-year and 5-year returns?

The 1-year return is 10.7137%, the 3-year return is 17.7359%, and the 5-year return is 21.0604%.

How does it compare with the benchmark?

It is ahead of the benchmark over 3 years and 5 years, but it trails the benchmark over 3 months and 1 year. The shorter windows have been less supportive than the longer record.

How does it compare with peer funds on available returns?

The fund’s 1-year return is below several peers, while its 3-year and 5-year numbers remain competitive against peers with available longer-term figures. The comparison is mixed across different time periods.

What is the minimum SIP amount?

The minimum SIP amount is ₹100.

What is the risk profile and exit load?

The fund is classified as High Risk. The exit load is 1% if units are sold within 1 year and nil after 1 year; the fund is managed by Samir Rachh.

Bottom line

Nippon India Small Cap Fund Direct Growth Plan looks better on a medium- to long-term lens than on a recent one-year lens. Its 3-year and 5-year records are ahead of the benchmark, while the latest year has been softer. The small-cap-heavy portfolio and the large Capital Goods allocation make it a fund that can move sharply, so it suits investors who can tolerate volatility and wait for the longer compounding pattern to play out.

Published on 25 August 2026 at 12:06 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.