India mid- and small-cap rally to persist, says DSP Mutual Fund's Parekh

The rally in India's mid- and small-cap stocks will continue amid more inflows into these segments, the head of India's tenth-largest mutual fund said on Tuesday, reports Reuters.
"The rally may continue due to more flows and less companies to invest in," Kalpen Parekh, managing director and CEO of Mumbai-based mutual fund DSP, told the Reuters Trading India forum.
Mid- and small-cap indexes have significantly outperformed their larger peer in 2023. The Nifty small-cap 100 index has risen nearly 33 per cent this year, while the Nifty midcap 50 index is up around 29 per cent, versus an 8.7 per cent rise in the benchmark Nifty 50.
DSP Mutual Fund will also launch a small-cap fund this year to take advantage of the inflows to the segment, Parekh said.
"We have approval for launching an index fund of small-cap with high-quality companies," he said, adding that the fund is likely to launch in December.
DSP manages assets of over $16 billion. In 2018, DSP Group purchased BlackRock's 40 per cent stake in DSP BlackRock Investment Managers and was renamed DSP Investment Managers.
BlackRock has returned to India this year in partnership with Mukesh Ambani's Jio Financial Services.
Parekh believes exchange-traded funds (ETFs) in India will continue to grow on the back of factors such as the simplicity of passive investing, driven primarily by money from India's provident funds.