ICICI Prudential Reopens Small-Cap Fund Amidst Market Shifts

ICICI Prudential Mutual Fund has announced the resumption of subscriptions in its small-cap fund, effective January 23. The fund house will now accept investments through both Systematic Investment Plans (SIP) and lump sum modes, removing previous restrictions on investment amounts.

This decision comes after a temporary halt on subscriptions, which began on March 13, 2024. The restrictions were initiated following directives from the Securities and Exchange Board of India (SEBI) aimed at protecting investors amidst concerns about rising valuations and significant inflows into the mid- and small-cap segments.

Small-cap stocks have experienced a period of underperformance relative to broader market indices. Over the past two years, the Nifty Smallcap 250 TRI delivered a CAGR of 6%, significantly lower than the Nifty 50 TRI's 9% and the Nifty Midcap 150 TRI's 12%. Furthermore, small-cap funds were the worst-performing equity mutual fund category in 2025, with most schemes posting negative returns.

Despite the reopening, ICICI Prudential continues to recommend hybrid and asset-allocation schemes for investors, citing recent market dynamics. The fund house had previously published stress-test results for mid- and small-cap schemes to inform investors about potential risks and the impact of market volatility.