Niket Shah, Chief Investment Officer at Motilal Oswal Asset Management Company, is set to transition to a new role as Managing Director within the Group's Principal Investments business, marking the end of an exceptional eight-year tenure that witnessed unprecedented growth in assets under management.

Remarkable AUM Growth Journey

Shah's leadership period has been characterized by extraordinary asset growth across the organization. The transformation in AUM figures demonstrates the scale of this achievement:

In his LinkedIn announcement, Shah reflected on the transformational nature of this journey, noting that the AMC's total AUM has risen many times over during his tenure.

Midcap Fund Turnaround Success

The Motilal Oswal Midcap Fund represents one of the most significant turnaround stories under Shah's leadership. When he assumed responsibility in H1CY20, the fund faced substantial challenges including underperformance of more than 25 percent and widespread redemptions. The fund was emerging from the COVID market bottom and had become a written-off mutual fund in many industry conversations.

However, the fund's revival has been remarkable, with AUM growing from ₹1,047 crore to ₹38,000 crore as of December 2025, representing a 38x increase over just four years.

Strong Performance Across Multiple Funds

The performance revival extended beyond the Midcap Fund to encompass the entire fund portfolio. Several funds delivered exceptional results:

• Multicap Fund: Delivered approximately 30 percent alpha in its first year
• Business Cycle Fund: Generated approximately 28 percent alpha in its first year post-NFO despite flattish market conditions
• Flexi Cap Fund: Successfully revived from bottom quartile to top quartile across 1-, 2-, and 3-year buckets

A significant milestone was achieved in early 2025 when 8 out of Motilal Oswal's 9 funds were ranked #1 across their respective categories across duration.

Substantial Net Inflows Reflect Investor Confidence

The strong performance translated into significant investor interest and distributor confidence. The company's net inflow figures demonstrate this trust:

These substantial inflows over the last two years reflect deep distributor confidence and sustained investor trust in the fund management capabilities.

Organizational Leadership Development

Shah's transition is part of a broader organizational strategy at Motilal Oswal Group to strengthen leadership depth and build future-ready capabilities across businesses. The Group has been proactively driving meaningful people movements, with more than 200 role changes taking place across the organization in the current financial year alone.

Shah was elevated to the Chief Investment Officer role at Motilal Oswal AMC in 2024, where he oversaw the Motilal Oswal Flexicap Fund and Motilal Oswal Midcap Fund with combined AUM exceeding ₹38,000 crore. His success has been attributed to the team's outstanding ideation, ability to identify themes ahead of the curve, and disciplined, timely exits from stocks.

Motilal Oswal Asset Management Company has announced the immediate discontinuation of subscriptions for its Nifty Microcap 250 Index Fund, effective from the cut-off time of January 8, 2026. The decision was made in consultation with SEBI, citing that microcap is not defined as a category based on market capitalisation.

Fund Closure Details

The fund house has implemented comprehensive restrictions across all investment modes. Fresh and additional purchases through lump-sum mode and switch-in transactions from other Motilal Oswal Mutual Fund schemes have been discontinued. The company has also halted fresh registrations under Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP), while existing SIPs and STPs have been paused from the effective date.

Any subscription amounts received after the applicable cut-off time, including SIP and STP transactions, will not be processed and will be refunded to investors without interest in accordance with applicable regulations.

Fund Performance and Objective

The Motilal Oswal Nifty Microcap 250 Index Fund currently manages assets worth approximately ₹2,600.00 crores. The scheme's investment objective is to provide returns that correspond to the total returns of securities represented by the Nifty Microcap 250 Total Return Index, before expenses and subject to tracking error.

Company Clarification on Concerns

Pratik Oswal, Head of ETFs and Index Funds at Motilal Oswal, addressed speculation about the decision in a clarification post. He emphasized that the issue is "purely around compliance with existing classification norms, and nothing else." Oswal noted that current micro-caps are significantly larger and more liquid than small-caps were five to seven years ago.

According to portfolio estimates, the number of days required to liquidate 50.00% of the fund's portfolio as of December 31, 2025, is just two days, indicating strong liquidity in the underlying assets.

Market Capitalisation Classification Context

The current market capitalisation classification system places the first 100 companies in large-cap, companies ranked 101 to 250 in mid-cap, and stocks beyond 250 in small-cap categories. Micro-cap stocks, while lacking a clear definition, generally represent the bottom segment of small-cap stocks. The market cap threshold for small-cap stocks has increased significantly from ₹2,000.00 crores five years ago to ₹12,000.00 crores currently.

Regulatory bodies including SEBI, AMFI, and fund houses are currently working on revamping categorisation norms, with new guidelines expected soon. SEBI Chairperson Tuhin Kanta Pandey recently cautioned AMCs investing in micro-cap companies, emphasizing the importance of maintaining proper documentation for investment decisions to ensure transparency and sound due diligence.