Nippon Small Cap Fund Adds BHEL, Trims HDFC Bank in May

Nippon India Small Cap Fund, the largest open-ended small-cap mutual fund in India with an AUM of ₹72,673 crore, reshuffled its portfolio in May. The fund raised exposure to power and industrial stocks while trimming financials and consumer goods, per its monthly portfolio disclosure.

The fund added to its positions in Bharat Heavy Electricals (BHEL), TD Power Systems, Avalon Technologies, and Central Mine Planning & Design Institute. It also bought more of State Bank of India, Gland Pharma, and Bajaj Consumer Care. A fresh position appeared in Bharti Airtel.

On the sell side, the fund reduced holdings in Voltamp Transformers, MCX, and HDFC Bank. It also trimmed Hitachi Energy India, ISGEC Heavy Engineering, Karur Vysya Bank, Whirlpool of India, Emami, Jyothy Labs, and Syngene International. The fund exited ITC and Siemens Energy India entirely.

BHEL remained the top holding despite a 0.26 percentage point increase in allocation. HDFC Bank stayed second even after a 0.12 point reduction. TD Power Systems rose to third place with a 0.17 point boost. MCX slipped to fourth after a 0.19 point trim. Apar Industries rounded out the top five.

The disclosure offers a window into the fund manager's sector bets. Power infrastructure and capital goods names dominate the additions. Financials and consumer staples saw trimming. The exits from ITC and Siemens Energy India signal a decisive shift away from FMCG and energy themes.

For small-cap investors tracking the fund's moves, the concentration in BHEL and TD Power Systems underscores the manager's conviction in India's capex cycle. The reduced stake in HDFC Bank may reflect valuation concerns or a need to rebalance after strong relative performance. The fresh bet on Bharti Airtel adds a telecom wildcard to a portfolio otherwise heavy on industrials.

The full list of top 10 holdings and percentage changes is available in the fund's monthly portfolio filing on the Nippon India website.