According to reports from Business Standard, Biocon and PB Fintech emerged as the top picks among mutual fund managers' small and midcap stock purchases in July. The pharmaceutical sector has been among the best-performing market segments, with Nifty Pharma registering nearly a 20% rise in 2026-27 (FY27) as of July end. Biocon has gained 18% in the same period, contributing to its appeal among fund managers. Recent market analysis suggests that while mid-cap stocks have dominated performance for a decade, a shift towards small-caps is emerging, with flexi-cap funds increasing small-cap allocations driven by improved fundamentals.
As reported by Business Standard, Diamond Power Infrastructure witnessed exceptional mutual fund interest with the total number of shares held by MFs surging 105x in July. Fund managers deployed ₹1,300 crore into the ₹22,000 crore market capitalisation stock. The stock has delivered impressive returns, gaining 167% so far in calendar year 2026. The company has been benefiting from the expansion of data centres and the broader transmission capex cycle. Market data shows that 39 of the 137 midcap stocks from the BSE Midcap and Nifty Midcap indices have surged between 100% and 338% since Modi became PM, highlighting the sector's strong performance trajectory.
According to recent market analysis, mid-cap stocks have hogged the limelight on pro-growth reforms by the Modi government, cheap valuations and falling commodity prices. The Nifty 50 index gained 2.17% last month amid weakening crude oil prices and a robust earnings performance from India Inc. The BSE's mid-cap index rose 0.5% and the small-cap index gained almost 1% on Monday compared with the 0.3% advance in the Sensex. However, investment advisors caution that with the expected recovery in the Indian economy in FY16, mid-cap stocks may see a big run-up in the market, but valuations remain at elevated levels. The 30% underperformance of the mid-cap index compared to the Sensex in the past two years merits the question whether it's time to buy mid-caps, as noted by Citi. Market experts recommend that investors should be cautious in selecting stocks, better to go with buying in smaller quantities and keep some cash allocated for the stocks, only to be used on the day when there is absolutely chaos on the street.
