PGIM India Equity Growth Opportunities Fund – Series II

Diversified

Equity

India Micro Cap

Others

Small Cap

Aggressive growth Investor Profile

Investor Profile

Empty

HNI, UHNI, Retail Investor, Mass AffluentTarget Segments

SEBI registered equity mutual fund suitable for all investor categoriesRegulatory Fit

PGIM India Equity Growth Oppurnities Fund focuses on high-growth Indian companies for wealth creation.

What This Strategy Does

PGIM India Equity Growth Opportunities Fund – Series II is an equity small-cap fund which captures India's emerging growth companies through a concentrated portfolio approach, deploying capital across industrials, healthcare, and consumer sectors to achieve broad-based earnings growth.

CW Expert Research Notes

Earnings Resilience

The fund exhibits benchmark-beating downside protection characteristics, outperforming in 7 of the last 10 down markets.

Small-Cap Conviction

With a 98.8% allocation to small-caps, the fund expresses high conviction in companies like Apollo Micro Systems and Data Patterns India, capitalizing on their earnings growth potential.

Cyclical Upside

Overweight positions in industrials and materials position the fund to benefit from a potential capex cycle revival, while valuation appears reasonable versus small-cap history.

Performance and Risk Analysis

Historical returns, volatility patterns, and how this fund has performed relative to its benchmark.

Detailed Risks

Market Risk

Potential recession driven by tightening monetary policy could dampen consumer demand, impacting industrials and consumer discretionary holdings, mitigated by small-cap tilt.

Liquidity Risk

Concentrated small-cap exposure could face liquidity stress during volatility spikes, hindering rebalancing or exits, partly offset by cash buffer.

Concentration Risk

Significant industrials (33%) and healthcare (18%) sector concentrations expose fund to regulatory risks and competitive pressures, diversification across sectors limits downside.

Specific Strategy Risk

Small-cap focus exposes strategy to execution risks from scaling challenges or earnings misses, rigorous fundamental research process monitors these risks.

Strategy Details

A closer look at the investment thesis, portfolio construction, and current holdings.

Core Investment Theme

Captures India's entrepreneurial dynamism through concentrated exposure to rapidly growing small businesses. This high-conviction approach provides access to emerging leaders before institutional capital discovers them, offering significant upside potential.

Broader Market View

Market Outlook

The equity markets appear to be in a post-correction phase, offering an attractive entry point as consumption and earnings normalize. Sectors like consumer, financials, and industrials stand to benefit from this recovery, though margin pressures and cyclicality remain key risks. The strategy's exposure to these areas positions it to capitalize on improving domestic demand.

Why This Strategy is Attractive Now

This strategy seems well-aligned with the current environment, with exposure to consumer cyclicals, financials, healthcare, and technology. The portfolio comprises market leaders across sectors like autos, retail, banking, and IT. With around 70 holdings, it offers diversification alongside a balance of growth and stability. Moderate beta and flexibility further enhance its risk-adjusted positioning.

Investment Style & Process

Investment Style

The portfolio exhibits a small-cap growth bias, emphasizing companies with structural growth opportunities across sectors like industrials and healthcare.

Why it Makes Sense

This approach aligns with the current market environment, where quality small-caps with visible earnings growth could outperform as the economy normalizes.

High-Level Investment Process

Sourcing: The strategy appears to source ideas from across market capitalization segments, with a focus on companies exhibiting structural growth drivers and sustainable competitive advantages. Selection: The selection process likely emphasizes qualitative factors like management quality, corporate governance, and capital allocation discipline, complemented by rigorous fundamental analysis to identify companies with attractive growth runways. Construction: Portfolio construction suggests a preference for conviction-weighted positions in high-conviction ideas, leading to a relatively concentrated portfolio of small-cap growth companies across sectors like industrials, healthcare, and consumer.

Portfolio Holdings Overview

SectoralAllocation

Utilities14%

Technology10%

Capital Goods33%

Financial Services3%

Consumers16%

Services24%

Top Stock Holdings

CompanySectorAllocation

Data Patterns India LimitedIndustrials6.60%

VRL Logistics LimitedHealth Care5.90%

Tips Industries LimitedMaterials5.80%

Bharat Rasayan LimitedConsumer Discretionary5.80%

Shyam Metalics And EnergyInformation Technology5.60%

Dollar Industries LimitedCommunication Services5.40%

Aarti Pharmalabs LimitedConsumer Staples5.30%

Globus Spirits LimitedFinancials4.80%

Ram Ratna Wires LimitedCash4.40%