Carnelian Mutual Fund has filed draft papers for the Carnelian Small Cap Fund with the Securities and Exchange Board of India (SEBI). According to the draft scheme document, the fund will be managed by Deepak Malik and Viraj Parekh, with Malik bringing 25 years of experience in the investment management industry and Parekh joining the AMC since March 1, 2026. The scheme will track the Nifty SmallCap 250 TRI index and requires a minimum investment of ₹500 in multiples of Re 1 thereafter.
The investment approach will be based on a combination of top-down and bottom-up research, as outlined in the draft scheme papers. The scheme's asset allocation will focus on equities & equity-related instruments of small-cap companies (65-100% of total assets), with equity and equity-related instruments of companies other than small-cap companies (0-35%), money market instruments and other liquid instruments (0-35%), and units of mutual fund schemes (0-35%). The fund manager will seek to identify businesses with sustainable competitive advantages, scalable business models, strong management quality, sound corporate governance practices, healthy balance sheets, and long-term earnings growth potential.
Deepak Malik, a CFA with 25 years of experience across organizations, has been associated with Carnelian Asset Management since September 2023. Previously, he worked with Edelweiss Securities and Axis Mutual Fund. Viraj Parekh has been with the AMC since March 1, 2026, responsible for monitoring portfolio performance, portfolio construction, and conducting investment research across sectors and companies. He served as a Research Analyst at Carnelian Asset Management & Advisors Private Limited from February 1, 2021 to February 28, 2026.
The stock selection process will concentrate on business quality and growth prospects, earnings visibility and cash flow generation, return ratios and capital allocation efficiency, management capability and corporate governance standards, industry structure and competitive positioning, and valuation attractiveness relative to company fundamentals and growth potential. The scheme may invest across sectors and themes while seeking to construct a diversified portfolio of small-cap companies that are available at reasonable valuations relative to their growth prospects.
According to the draft scheme document, no exit load will be levied in case of switch of investments between the Plans (Regular and Direct Plans) and between the options (IDCW and Growth options) within the scheme/plan. For any change in load structure, the AMC will issue an addendum and display it on the website/ISCs. The scheme may also invest in gold and silver ETFs as permitted by SEBI, units issued by InvITs, and other liquid instruments including cash, bank deposits, government securities, treasury bills, and repo on government securities.
