The art of finding Alpha
IntroducingCarnelian
Small Cap Fund
A small cap fund with a ₹5,000* cr cap on its size, so it stays nimble and focused on alpha, not AUM. Built on forensic research and a simple rule: Quality growth, at a reasonable price.
*During NFO or on ongoing basis, once ₹5,000 crore AUM is achieved, fresh subscriptions (including switch-ins and STPs, but excluding SIPs) shall be suspended as prescribed in SID, with re-opening at the AMC's discretion. Refer SID for more details.
Small caps · A fertile ground for wealth creation
Four reasons why
Pick a reason, or step through all four.
India leads multi-baggers amongst emerging markets
Share of multi-baggers in 5-year rolling period from 2000 to 2023
- India (NSE 500)54%
- Australia (ASX 200)35%
- Korea (KOSPI)34%
- Brazil (IBOV)32%
- South Africa (JALSH)29%
- China (MSCI China)18%
- Taiwan (TWSE)18%
- Europe (SXXP)17%
- US (SPX)16%
- Japan (TOPIX)16%
For illustrative purposes only. Out of 54% stocks that became multi-baggers of NSE 500, 70% were small cap companies. To identify the multi-bagger stocks, returns are calculated for a 5-year rolling period between 2000 to 2023. The above data is based on June 1, 2023 report published by Goldman Sachs. Cap size in any year is based on market cap thresholds of NSE500 constituents, where in Top 100 are large cap, Next 150 Mid cap and rest are small cap stocks. The market capitalization is subject to change. Past performance is no guarantee of future result or performance and may or may not be sustained. Australia, Europe, US, Japan are developed markets.
Where they came from
70%
of the multi-baggers have come from the small cap universe.
Investment experience
Small caps are volatile, not fragile
Small caps can fall sharply in the short run. Pick a holding period and see how the Nifty Smallcap 250 TRI has behaved since 2005.
If you had stayed invested for…
Across a 7 year daily rolling returns since April 2005, the worst outcome was 1.80%, the best was +24.33% and the average was +12.99% a year. 100% of any 7-year period ended positive.
Source – ICRA MFI 360, Data as on August 31, 2026. 1, 3, 5, and 7 year daily rolling returns of Nifty Small cap 250 TRI have been considered over the period from April 1, 2005 to August 31, 2026. . This is for illustration and information purpose only. This is index data and not indicative of future results. Past performance may or may not be sustained in future and the same may not necessarily provide the basis for comparison with other investment.
Seven years. Historically* has never experienced any negative period
Historically*, time has smoothed out the swings. That's why this fund is meant for investors who think in years, not months. Past performance may or may not be sustained in future.
*7 year daily rolling returns have been considered over the period from April 1, 2005 to August 31, 2026.
The fund in a nutshell · Alpha, not AUM
Carnelian Small Cap Fund
Focused ideas. High conviction. Disciplined execution.
High active share
A differentiated portfolio versus the benchmark.
Rigorous research & due diligence
Proprietary frameworks and deep fundamental analysis.
Capacity discipline of ₹5,000* cr AUM
Aim to generate alpha, limit downside and ensure agility.
High-conviction portfolio construction
30–50 quality growth companies at a reasonable price.
Disciplined to find and compound high-quality opportunities, not chase size.
The above process is an internal process which is subject to change or variation without any notice
Our competitive advantage
Small cap investing demands discipline. So we built the fund around it.
How we pick winners, and how we screen out the accidents. Tap each challenge to see Carnelian's response.
CLEAR + CONNECT
Forensic diligence plus ground-level assessment.
See the forensic framework →Capacity discipline
₹5,000* cr AUM cap. Chasing alpha, not AUM.
In small caps, size may be an advantage to generate alpha.
Nimble by design.
Move in and out of positions without moving the stock.
Nimble by design
A capped corpus lets the fund move in and out of positions without moving the stock, and keeps focus on alpha over asset gathering.
Focused, not diluted
High-conviction bets, not dilution into weaker names just to deploy capital.
Early to compounding themes
Small size lets us enter emerging sectors and businesses before they're on the broader market's radar.
*During the NFO period, if realised subscriptions reaches ₹5,000 crore at the end of any business day, the NFO shall close from the subsequent 3rd business day or the end of the NFO period, whichever is earlier, and the scheme shall not accept any further subscriptions, including switch-ins and Systematic Transfer Plan (STP) transactions. However, the NFO shall be open for regulatory limit of minimum 3 working days. On an on-going basis, if the AUM of the scheme, based on the end-of-day valuation post declaration of the applicable NAV, reaches ₹5,000 crore, the scheme shall discontinue accepting lumpsum subscriptions, including switch-ins and Systematic Transfer Plan (STP) transactions, with effect from the subsequent 3rd business day. The scheme shall continue to accept investments registered through Systematic Investment Plans (SIPs) including both existing and new SIP registrations, during the NFO period and on an ongoing basis after the closure of the NFO period. Further while the restriction is imposed, as and when deemed fit, the AMC may reopen the scheme for subscriptions, subject to requisite approvals. Unitholders shall be informed through an addendum on www.carnelianmf.com.
Our investment philosophy · QGARP
Quality growth at a reasonable price. Built on two pillars.
Quality-first: strong businesses, integrity in management. Growth: accelerated earnings growth and valuation re-rating. Valuation: we are conscious of what we pay.
Risk management is fundamental to what we do
Take risk only when the risk-reward is in your favour
We invest only where the upside clearly outweighs the downside.
Know the source of risk, and you can manage it well
Once we know where risk comes from, we can manage it.
Know the source of risk. We split it into three types and treat each one differently. Which one worries you most?
Weak or dishonest management, and businesses at risk of disruption.
Avoid firmly, using CLEAR and CONNECT.
Our edge in risk management: deep forensic research
Step 1 · Forensic analysis
CLEARchecks the numbers
Step 2 · Overall validation
CONNECTchecks the reality
Tap a node.
OutcomeWe seek to avoid weak managements and disruption-prone businesses.
The objective
Lower downside, higher upside, real alpha
Risk management
↓ Limit the downside
- Rigorous research process to manage risk
- CLEAR + CONNECT forensic checks
- Take risk only when odds favour us
Accelerated growth
↑ Capture the upside
- MAGIC: earnings growth + re-rating
- Compounder: steady earnings growth
- Always at a reasonable price
A structured process to identify high-quality businesses
From 1000+ companies to 30–50 stocks
Apply each filter and watch the universe narrow.
Filter 1 of 5
Investment universe
Sectors and themes.
The outcome: A focused portfolio of high-quality businesses with the potential to create risk adjusted alpha. The above process is an internal process for identifying the stocks, which is subject to change or variation without any notice. The scheme’s portfolio will be built as per the provisions of their offer documents
Small cap: 251st company onwards in terms of full market capitalisation. Counts are indicative.
Composition design
Three engines, one direction
MAGIC
Accelerated growth: earnings growth plus re-rating.
Compounder
Potential growth: durable moat, strong free cash flow.
Opportunistic
Special situations and mispricings.
Indicative portfolio construction bands. Actual allocation is at the fund manager's discretion within the asset allocation in the Scheme Information Document.
The fund at a glance
Asset allocation
| Asset class | Minimum | Maximum |
|---|---|---|
| Equity and equity-related instruments of small cap companies | 65% | 100% |
| Equity and related instruments of companies other than small cap | 0% | 35% |
| Money market instruments and other liquid instruments* | 0% | 35% |
| Units of mutual fund schemes# | 0% | 35% |
| Gold and silver ETFs as permitted by SEBI | 0% | 35% |
| Units issued by InvITs | 0% | 10% |
*Other liquid instruments shall include cash, bank deposits with Scheduled Commercial Banks, Government Securities, Treasury bills, Repo on Government securities and any other instruments as specified by SEBI from time to time. Small Cap companies shall have the meaning as defined by SEBI from time to time. NFO collections are required to be deployed within 30 business days after unit allocation #Units of Liquid Fund, Overnight Fund and Money Market Fund schemes of Carnelian Mutual Fund and/or other mutual funds as permitted by SEBI. Please refer the asset allocation as stated in offer documents of the scheme for further details.
Sponsor profile
Founders of the sponsor with strong, complementary skill sets
Sponsor founders
Vikas Khemani
CA, CFA, CS · Exp-28 years
Prior CEO at Edelweiss Securities
Known for incubating & developing several businesses into market leaders, identif ying structural themes ahead of consensus, combining entrepreneurial execution with disciplined, long-term investing
Manoj Bahety
CA, CFA · Exp-28 years
Prior Head of Research at Edelweiss Securities
Known for non- consensus research approach & pioneering differentiated forensic research, known as “Analysis Beyond Consensus” (ABC Research).
Swati Khemani
CA · Exp-24 years
Prior Head of FSG, Edelweiss Securities
Known for scaling Carnelian into one of the fastest- growing asset managers; responsible for the overall business, building strong client relationships, and shaping a cohesive, high-performing team through her leadership
Above details are of sponsor of Carnelian Mutual Fund i.e. Carnelian Asset Management & Advisors Private Limited
Fund Managers · Fund management team of Carnelian AMC
Deepak Malik
Fund Manager
Deepak Malik is Fund Manager at Carnelian Investment Managers Private Limited, responsible for investment decisions and portfolio construction.
Viraj Parekh
Fund Manager
Viraj has been associated with the AMC since 1st March 2026 where he will be responsible for monitoring portfolio performance, portfolio construction, conducting investment research and analysis across sectors and companies, etc
The fund at a glance
Carnelian Small Cap Fund
An open-ended equity scheme predominantly investing in small cap stocks.
- Scheme category
- Equity Scheme — Small Cap Fund
- Type of scheme
- An open-ended equity scheme predominantly investing in small cap stocks
- Investment objective
- The Scheme seeks to generate long-term capital appreciation by investing predominantly in equity and equity related securities of Small Cap companies. There is no assurance that the investment objective of the Scheme will be achieved.
- Investment philosophy
- Top-down + bottom-up investment approach. Based on quality, governance, growth, cash flow and valuation framework.
- Risk positioning
- A very high-risk equity product intended for investors who can withstand potentially significant market volatility and have a long-term investment horizon.
- NFO period
- Opens 16 October 2026. Closes 30 October 2026. Scheme re-opens 13 November 2026.
- Benchmark
- AMFI Tier I Benchmark: Nifty Smallcap 250 Total Return Index (TRI)
- Fund managers
- Deepak Malik (CIO & Fund Manager), Viraj Parekh (Fund Manager)
- AUM cap
- ₹5,000 crore*
- Plans & options
- Direct and Regular Plan, each with Growth and IDCW Option (Re-investment and Pay-out Sub-Option)
- Entry load
- Nil
- Exit load
- 1% if redeemed on or before 365 days from the date of allotment. Nil if redeemed after 365 days from the date of allotment. Exit load will not be applicable on switch amongst the Equity Schemes of Carnelian Mutual Fund.
- Minimum investment
- ₹500 and in multiples of ₹1 thereafter
- Minimum additional subscription
- ₹500 and in multiples of ₹1 thereafter
- Minimum redemption / switch-out
- ₹500 and in multiples of ₹1 thereafter
- Facilities
- Systematic Investment Plan, Systematic Transfer Plan and Systematic Withdrawal Plan
- NFO deployment
- NFO collections are required to be deployed within 30 business days after unit allocation.
Carnelian small cap fund (Scheme Type - An open ended equity scheme predominantly investing in small cap stocks)
- Capital appreciation over the long term.
- Investment in equity and equity-related instruments of small cap companies.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Scheme Risk-o-meter
Benchmark Risk-o-meter
Nifty Smallcap 250 TRI (as per AMFI Tier I Benchmark)
The above product labelling assigned during the New Fund Offer (NFO) is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made.
Offer for Units of ₹10 each for cash during the New Fund Offer and continuous offer for Units at NAV-based prices.
A New Fund Offer is the first time a new mutual fund scheme is open for subscription. Carnelian Small Cap Fund's NFO runs from 16 to 30 October 2026. As an open-ended scheme, it reopens for ongoing purchases and redemptions from November 13, 2026, as stated in the Scheme Information Document.
Alpha,not AUM.
Carnelian Small Cap Fund · NFO 16 – 30 October 2026. Leave your details and we'll let you know.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Be the first to know more when the NFO opens.
Leave your details. We'll reach out on 16 October.