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Groww Launches New Small-Cap Mutual Fund

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  Published in Stocks and Investing on Thursday, January 8th 2026 at 2:16 GMT by Business Today

Bengaluru, India - January 8th, 2026 - Groww, the rapidly growing investment platform, today launched its latest mutual fund scheme: a small-cap fund aimed at capitalizing on the potential of emerging Indian businesses. The New Fund Offer (NFO) period commenced today, January 8th, 2026, and will remain open until January 15th, 2026, offering investors a limited window to participate in the initial offering.

This launch marks a significant expansion of Groww's presence in the competitive mutual fund landscape. While the platform has already established itself with a range of fund options, the addition of a small-cap fund caters to a growing investor appetite for higher-risk, higher-reward opportunities. Small-cap companies, characterized by their smaller market capitalization, often exhibit strong growth potential but also come with increased volatility.

Fund Objective and Strategy

The Groww Small-Cap Fund is designed for investors seeking long-term capital appreciation. The fund will primarily invest in equity and equity-related instruments of small-cap companies listed on Indian stock exchanges. Fund managers will likely employ a combination of top-down and bottom-up approaches to stock selection, focusing on identifying companies with strong fundamentals, growth prospects, and sound management teams. Given the inherent volatility of the small-cap segment, active management and careful risk mitigation strategies will be crucial to the fund's success.

Accessibility and Investment Details

Groww is positioning this fund as accessible to a broad range of investors, with a minimum investment amount of just INR500. This low barrier to entry aims to democratize access to small-cap investing, allowing individuals with limited capital to participate in potentially high-growth segments of the market. The platform's user-friendly interface and streamlined investment process further simplify the process for both new and experienced investors.

Exit Load Structure: Balancing Liquidity and Long-Term Investment

Groww has implemented an exit load structure designed to incentivize long-term investment while acknowledging the need for investor liquidity. An exit load is a fee charged when investors redeem their units before a specified period. The Groww Small-Cap Fund features the following exit load schedule:

• 10%: Redemptions within 12 months of allocation.
• 5%: Redemptions between 12 and 24 months of allocation.
• Nil: Redemptions after 24 months of allocation.

This tiered structure discourages short-term trading and encourages investors to maintain a long-term perspective, aligning with the fund's objective of capital appreciation over an extended timeframe. The decreasing exit load over time rewards patient investors who are willing to ride out market fluctuations.

Implications for Investors and the Market

The launch of this fund arrives amidst increasing interest in small-cap stocks, fueled by optimistic economic outlooks and the potential for outsized returns. However, experts caution that small-cap investing is not without its risks. These companies are often more susceptible to market downturns and liquidity constraints. Therefore, investors should carefully consider their risk tolerance and investment horizon before allocating funds to this asset class.

Groww's entry into the small-cap segment is expected to intensify competition amongst mutual fund providers, potentially leading to more innovative products and lower fees. It also highlights the growing trend of digital platforms disrupting the traditional financial landscape, offering investors greater convenience and access to a wider range of investment options. The success of this NFO will be closely watched as an indicator of investor sentiment towards small-cap investments and the continued growth of Groww as a leading investment platform.