The RBI has raised the repo rate by 25 bps, from 5.25% to 5.50%, marking the first change in the policy rate since December 2025. The move comes after the RBI had cut the repo rate by 125 bps during 2025, taking it to a multi-year low of 5.25%.
So, why the reversal?
The rate hike comes as the RBI reassesses the balance between inflation risks and borrowing costs after the easing cycle. Higher interest rates can help contain demand and inflationary pressures, but they also make borrowing more expensive for households and
businesses.
For home-loan borrowers with repo-linked or other external-benchmark-linked loans, the impact could show up in EMIs once lenders transmit the hike.
Small-cap funds don’t always stay as small-cap as you might expect.
Across the largest small-cap funds, small-cap exposure ranges from 63% to 88% while 5-year returns vary considerably.
So, how much small-cap exposure are you actually getting when you invest in a small-cap fund?
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