Inside One of India's best Small Cap Strategies | Sonia Shenoy Podcast

On this weeks episode , we speak to Manish Gunwani , CIO of Bandhan Mutual Fund. Manish Gunwani is a fund manager par excellence. Having spent over 30 years managing public money , he now oversees an AUM of 2 lakh crores at Bandhan Mutual fund. The discussion begins with understanding how the Bandhan Small Cap Fund has delivered strong performance and what factors contributed to its success over the years. Manish also explains how a rising AUM can impact the functioning of a small cap fund and what fund managers need to keep in mind when managing large pools of capital. As the conversation progresses, we talk about the current valuations of the Indian market and how investors should look at them in today’s environment. Manish shares his approach to selecting stocks and explains how fund managers try to identify companies with the potential to become multibaggers at an early stage. He also shares examples of companies that were identified early by the team at Bandhan AMC. The discussion further explores emerging themes such as artificial intelligence and its potential impact on different sectors, including discretionary consumption. We also touch upon Manish’s views on sectors like real estate and textiles and discuss which sectors could offer opportunities over the next four to five years. Overall, this episode offers practical insights into how professional investors think about markets, valuations, and long term wealth creation. Disclaimer: The ideas, analyses, and strategies shared on this platform are for educational purposes only. They should not be interpreted as financial advice. Any decision to act on the content provided is made at your own risk. Chapters 00:00 - Introduction 01:29 - Welcoming Manish Gunwani 04:25 - Manish's 15-year journey across large, mid, and small caps 05:23 - Small cap fund philosophy: will the returns continue? 09:59 - Any valuation concern left in small caps? 12:10 - Why aren't Indian large caps innovating like Nvidia? 18:40 - Structurally bullish on pharma - why? 21:45 - Does fund size become a problem at scale? 23:53 - The HDFC Bank debate: why do funds still own it? 26:47 - Large private banks vs small banks (South Indian Bank, DCB, Karnataka Bank) 28:22 - Is valuation the base criteria? Betting on Zomato, PTM, InfoEdge 30:31 - The 3-year investment thesis threshold 32:36 - Insurance sector: general vs life, and why it's "suffering" 39:12 - Manufacturing, jobs, and the disposable income thesis 42:15 - What else is needed to fix India's broken systems? 45:58 - The AI trade unraveling - how worried should Indian investors be? 50:38 - IT services: which side of the fence is Manish on? 56:54 - One piece of advice for the younger generation 59:15 - Has education (and IIT/IIM) become obsolete? 1:03:10 - Reflecting on 30 years in the markets 1:04:13 - Mentors: Ashish Kacholia and Narain 1:06:12 - Book recommendations 1:08:14 - Handling stress and constant comparison in fund management 1:12:10 - Building fortitude through spirituality and detachment 1:14:13 - Closing