Reliance Small Cap Fund

1. A R C

2. Table Of Contents
India Opportunity
Why Invest in Small Caps
Investment Case for Small Caps
Success Essentials and Reliance Mutual Fund Advantage
Reliance Small Cap Fund
Investment Strategy
Positioning
Product Features

3. India Moving Towards Higher Growth Trajectory
...despite concerns of coalition politics, bureaucracy & poor infrastructure
Estimated for 2009-2011
Source: CIEC, RCAM Estimates

4. India - The Next Trillion Dollar Opportunity
INDIA’S GDP IN USD TRILLION
India took 60 years to get to its first USD 1 Trillion GDP in FY08 but the move to USD 2
FY08,
Trillion GDP will be in next 5-6 years, similar to that of China
Due to the huge consumption and savings/investment boom, USD 2 Trillion GDP is not a
destination, but a milestone in India’s ongoing journey towards USD 4 Trillion GDP in the
g gj y
subsequent 5-7 years, and so on
Estimated for 2010-2014
Source: CMIE, MOSL, RCAM Estimates

5. Emerging Markets To Attract Higher Inflows
Period 1995-99 2000-04 2005-09 2009 Growing size of EM economy and
Avg. World GDP $Bn 30,292 35,291 53,583 57,228
fading distinction between EM
Proportion of the World Average GDP level (%)
DM countries 80.4 79.5 72.2 69.3 and DM economies should lead to
US 27.6 30.5 25.7 24.9 increased capital allocation to EM
UK 4.4 4.9 4.6 3.8
economies
Euro area 23.2 21.4 22.1 21.5
Japan 14.8 12.2 8.7 8.8
Period 1995-99 2000-04 2005-09 2009
EM countries 19.6 20.5 27.8 30.7
Avg.World M-Cap 14,047,039 17,734,308 25,689,296 24,630,640
Brazil 2.6 1.7 2.4 2.6
Proportion of the Average World M-Cap (%)
Russia 1.0 1.1 2.2 2.2
DM markets 94.1 95.3 90.1 86.8
India 2.2 1.5 1.9 2.2
United States 46.6 51.9 44.3 42.5
China 3.1 4.3 6.5 8.3
United Kingdom 9.7 10.4 9.6 9.0
South Africa 0.5 0.4 0.5 0.5
Europe (ex-EM) 30.0 29.1 29.0 27.3
Japan 13.8 9.0 9.5 8.6
Presently,
Presently EM economies hold over 30% EM markets 5.9 4.7 9.9 13.2
share in Global GDP, while their share in Brazil 0.7 0.4 1.3 2.2
Global market cap is only 13% Russia 0.2 0.2 0.8 0.8
India 0.4 0.3 0.7 1.0
China 0.0 0.3 1.5 2.4
Korea
K 0.6
06 0.8
08 1.4
14 1.7
17
MSCI Indices used as proxy for market-cap data (Units: USD million)
Source: IMF GDP data, MSCI m-cap data, RCAM Estimates, DM : Developed Markets, EM: Emerging Markets

6. Investments Will Flow To India
USD (Trillion) CY2008 CY2014
BRIC
GDP 8.29 16.36
Market Cap 5.61 16.36
FII Investments* 1.00 ??
US
GDP 14.20
14 20 16.47
16 47
Market Cap 12.09 16.47
FII Investments* 10.64 ??
In 2014 BRIC’s combined GDP will be equal to US GDP
2014, BRIC s
At Market Cap GDP ratio of 1, BRIC countries will have a market cap of USD 16.36
Trillion
Significant FII money will flow into the BRIC markets – India will gets its share of
investments
Source - RCAM Estimates, *FII numbers are approximations, BRIC – Brazil, Russia, India, China

7. Investment Outlook
Currently market is evenly poised with positive bias
India has emerged stronger from the global slump and is back on track to grow in excess
of 7-8% per annum
For a sustained long term growth, the 3 growth drivers are in place:
Savings – Domestic savings are among the highest in the world
Consumption – S t t explode
C ti Set to l d
Investments – At 34% of the GDP, again among the highest in the world
Policy announcements will have significant impact on the direction of the market
y g p
Themes for the coming year
Big valuation disparity among large, mid caps & small caps. Opportunity for alpha
creation
Stock selection will be the key Source: Bloomberg, RCAM Estimates

8. Why Invest In Small Caps?

9. Key Benefits Of Investing In Small Caps
Higher Earnings Growth
Small
Cap
Presence in Emerging Sectors Large Universe

10. Emergence Of Small Caps To Large Caps
Today s
Today’s Small …Are Tomorrow’s Potential
Tomorrow s
Caps …. Which May Eventually
Mid Caps, Become Large Caps
Small Caps Mid Caps Large Caps

11. Re – Rating Potential For Small Caps
Small Cap Mid Cap Large Cap
Research Available Limited Moderate Widely
Institutional Very
Ownership Moderate Large
Limited
Valuation Multiple
p
Low Moderate Fair

12. Entrepreneurial Passion
Indian entrepreneurial skills / mindset / spirit has been globally acknowledged over a
period of time
End f License R j h opened many b i
E d of Li Raj has d business opportunities f entrepreneur
t iti for t
Multiple sources of fund raising at various stage of business has been of tremendous
help
p
Competitive talent is being attracted & retained by rewarding performance linked
incentives, ESOPs, etc
In today’s economic environment, individuals with entrepreneurial mindset are exploring
new business opportunities that will not only survive in a recession but will also thrive
Thus, E
Th Emerging I di i offering various growth opportunities t entrepreneurs, b it fi t
i India is ff i i th t iti to t be first
generation entrepreneur or otherwise

13. Emerging Sectors Offer Opportunities For Growth
In a developing economy like India, multiple sectors provide opportunities for growth
Example: Retailing, Food Processing, Pharmaceuticals, Media & Entertainment,
Real Estate, Education, Hospitality etc
y
Once established and successful, ramp up can be rapid
Thus, emerging sectors are true reflection of entrepreneurial spirit, new opportunities
and creation of global behemoths

14. Dynamics Of Multi - Baggers
Market Capitalization = Net Profits X Perception
Market Price = EPS X PE
High Growth Potential / Scalability Under Ownership, Under
Differentiated Business Model Researched & Under Covered
Emergence of Educated & Understanding Value of Market Cap
Passionate Management Various Modes of Fund Raising
Niche focus & ability to attract talent Emerging Sectors start small –
in form of Quasi Entrepreneurs & Technology, Retail, Real Estate,
Stock Options Insurance etc
This simultaneous impact on both EPS & PE creates a MULTI BAGGER

15. How Small Caps Are Classified ?
There is no scientific methodology to classify Large Caps, Mid Caps and Small Caps
but there are pre-defined indices on BSE & NSE
Mentioned below is the categorization of the same on the basis of market capitalization
as on August 2010
Index Market Cap Total Market
No. Of
Indices Categorization Range Cap approx
Companies
(Rs. Crs) (Rs Crs)
BSE SENSEX Large Cap
g p 30 15,300 – 329,400
, , 2,761,687
, ,
BSE Mid Cap Mid Cap 273 1000 – 12,350 1,078,821
BSE Small Cap Small Cap 534 170 – 2300 351,840
Source: www.bseindia.com, 5th August 2010 , Index Market Cap Range given implies companies with the smallest market cap and largest market cap in that particular
indices respectively as on August 5, 2010. Small Cap stocks for the purpose of the Reliance Small Cap Fund are stocks whose market capitalization is in between the
highest and lowest market capitalization of companies on BSE Small Cap Index

16. The Indian Small Cap Opportunity
4300+ Cos. listed on Bombay Stock Exchange
1383 Cos. with Market Capitalization of over Rs 100 Cr
1065 Cos. with Market Capitalization of over Rs 200 Cr
664 Cos. with a Sales Turnover of over Rs. 200 Cr
613 Cos. with an Operating Profits over Rs 25 Cr
548 Cos. with net profits of over Rs 10 Cr
p
Source : www.bseindia.com, Capitaline Neo as on 6th August 2010

17. Investment Case For Small Caps
Performance Over The Last 2 Years (31st July 08 - 30th July 10) Valuation As On 31st July 2010
Outperformance of Index
I d P/E Price T Book Value
P i To B k V l
Index CAGR (%) BSE SMALL CAP
Relative To Indices S&P CNX Nifty 22.31 3.78
S&P CNX Nifty 11.32 5.00 BSE SENSEX 21.20 3.40
BSE SENSEX 11.58 4.74 BSE MIDCAP 19.24 2.90
BSE MIDCAP 15.37 0.95 BSE SMALL CAP 15.66 2.34
BSE SMALL CAP 16.32
Source : www.bseindia.com, Capitaline Neo as on 6th August 2010
Small Caps are still available at better valuations compared to Large Caps

18. Examples of how Small Cap companies have emerged
E l fh S ll C i h d
as Large Cap companies over a period of time
creating wealth for the shareholders
The companies chosen herein are purely for illustrative purpose only
Reliance Mutual Fund or Reliance Small Cap Fund may or may not invest in the shares of these companies
The investment decision of Reliance Mutual Fund to invest in any company is based on several factors including
research, market potential, future outlook etc

19. Retailing
Market Capitalization Market Capitalization
(July 30th 2001) (July 30th 2010) Outperformance relative to
Company Name BSESENSEX
(Rs. Cr) (Rs. Cr) (July 30th 2001- July 30th 2010)
Pantaloon Retail (India)
P l R il (I di ) 19.98
19 98 9457.13
9457 13 19,316%
19 316%
PAT
Rs.140.58 Crs
(30th June 2009)
PAT
Rs.6.40 Crs
(30th J
June 2001)
Source as on 31st July 2010, Capitaline Neo

20. Realty - Construction
Market Capitalization Market Capitalization
(July 31st 2003) (July 30th 2010) Outperformance relative to
Company Name BSESENSEX
(Rs. Cr) (Rs. Cr) (July 31st 2003- July 30th 2010)
Unitech
U i h 72.44
72 44 20,457.53
20 457 53 17,550%
17 550%
PAT
Rs.1,195.53 Crs
(31st M
March 2009)
h
PAT
Rs.13.57 Crs
(31st M
t March 2003)
h
Source as on 31st July 2010, Capitaline Neo

21. Computers - Education
Market Capitalization Market Capitalization
(Jan 31st 2006) (July 30th 2010) Outperformance relative to
Company Name BSESENSEX
(Rs. Cr) (Rs. Cr) (Jan 31st 2006- July 30th 2010)
Educomp Solutions
Ed S l i 447.20
447 20 5,797.46
5 797 46 904%
PAT
Rs.140.33 Crs
(31st March 2009)
PAT
Rs.14.00 Crs
(31st March 2006)
Source as on 31st July 2010, Capitaline Neo

22. Healthcare
Market Capitalization Market Capitalization
(Jan 31st 2001) (July 30th 2010) Outperformance relative to
Company Name BSESENSEX
(Rs. Cr) (Rs. Cr) (Jan 31st 2001- July 30th 2010)
Apollo H
A ll Hospitals
i l 715.31
715 31 4,841.08
4 841 08 20%
PAT
Rs.130.03 Crs
(31st March 2010)
PAT
Rs.30.92 Crs
(31st March 2002)
Source as on 31st July 2010, Capitaline Neo

23. FMCG – Food & Dairy Products
Market Capitalization Market Capitalization
(July 1st 2003) (July 30th 2010) Outperformance relative to
Company Name BSESENSEX
(Rs. Cr) (Rs. Cr) (July 01st 2003- July 30th 2010)
Zydus W ll
Z d Wellness 2.31
2 31 2,015.23
2 015 23 9,924%
9 924%
PAT
Rs.46.71 Crs
(31st March 2010)
PAT
Rs.0.94 Crs
(31st M
t March 2003)
h
Source as on 31st July 2010, Capitaline Neo

24. Dynamics Of Successful Small Cap Investing
Stock Selection
Small Cap investing is all about stock selection rather than asset allocation
Stock selection based on
Size of opportunity
Possible higher growth and its sustainability
Emerging theme / sector (Example: real estate retail food processing etc)
estate, retail,
Zeal of management to scale and grow
Stock price movement tend to be more volatile
Limited research
Lesser/negligible institutional ownership
However the sharp volatility subsides over a longer period and makes way for
higher profitability

25. Reliance Mutual Fund Advantage
Our Expertise
Bottom up approach has been strongly advocated as the key investment strategy of
Reliance Mutual Fund
Fund.
Well-experienced team of investment professionals having
Collective experience of over 150 years in Indian equities
Most members individually tracking Indian equity markets for well over 15 years
In depth research capabilities to identify small caps with huge growth potential
Our research capability empowers the Fund Manager to be BOLD in identifying high
growth potential stocks & manage the RISK associated with it
Only fund in RMF’s product basket with a pre-dominant investment focus on small
cap companies where stock selection would play a key role
Past Performance may or may not be sustained in future

26. Reliance Mutual Fund
Presents
Reliance Small Cap Fund
A Fund With
A Very Aggressive Investment Style

27. Investment Philosophy
With an endeavor to maximize returns & minimize risks by reasonable diversification ,
primary focus would be on small cap stocks
Investment in Equities of Small Cap Companies : 65%-100%*
Investment in Equities of any other Companies : 0%-35%*
Investment i D bt & M
I t t in Debt Money M k t S
Market Securities : 0% - 35%*
iti
Small cap stocks, for the purpose of the fund are defined as stocks whose market
capitalization is in between the highest & lowest market capitalization of companies
p g p p
on BSE Small Cap Index
Investment with a longer term horizon
* Please refer detailed asset allocation on slide no 29. Market Capitalization: Market value of the listed company, which is
calculated by multiplying its current market price by number of its shares outstanding

28. Positioning Of Reliance Small Cap Fund
Returns
High Medium Low
Reliance Small
High
Risk
Ri k Cap Fund
C F d
Medium
Low
A very aggressive small cap oriented fund
A relatively high risk/high return oriented fund characterized by volatility which will get
smoothened out over long term investment horizon
Reliance Small Cap Fund will be a vital part of an investor’s core portfolio that aims to
create an alpha for their investments

29. Scheme Features
The primary investment objective of the scheme is to generate long term capital
appreciation by investing predominantly in equity and equity related instruments
Investment Objective of small cap companies and the secondary objective is to generate consistent
returns by investing in debt and money market securities
Benchmark BSE Small Cap Index
Equity & equity related securities of small cap companies including derivatives#
- 65% 100%
65%-100%
Equity & equity related securities of any other companies including derivatives#
Proposed Asset - 0%-35%
Allocation Debt & Money Market Securities **(including investments in securitised debt)
- 0% - 35%
** including securitised debt up to 30%
# The Scheme proposes to invest at least 65% of the corpus in Equity & equity related instruments of small cap
companies which may go upto 100% of the corpus. The investment in Equity & equity related instruments of
any other companies other than small cap companies will be in the range of 0-35% of the corpus
F d Manager
Fund M Sunil Singhania
New Fund Offer Price: Rs.10/- per unit

30. Scheme Features
Choice of Plans/Options Load Structure : During New Fund Offer &
Continuous Offer including SIP Installments
Growth Plan:
Growth & Bonus Option
Entry Load:
E t L d Nil
Dividend Plan :
Dividend Payout Option Exit Load:
Dividend Reinvestment Option • 2% If redeemed or switched out on or before completion of
12 months from the date of allotment of units
Minimum Application Amount
• 1% If redeemed or switched out after 12 months but on or
Rs.5000 & in multiples of Re. 1 thereafter before completion of 24 months from the date of allotment
of units
Additional Purchase Amount
• Nil If redeemed or switched out after th completion of 24
d d it h d t ft the l ti f
Rs.1000 (plus in the multiple of Re.1) months from the date of allotment of units
In accordance with the requirements specified by the SEBI circular no. SEBI/IMD/CIR
SIP No.4/168230/09 dated June 30, 2009 no entry load will be charged for purchase / additional
purchase / switch-in accepted by the Fund. Upfront commission shall be paid directly by the
investor to the AMFI Registered Distributor based on the investor’s assessment of various
Mode of Payment : Auto Debit/ECS factors including the services rendered by the AMFI Registered Distributor.

31. Disclaimers
The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the readers. This information is
meant for general reading purpose only and is not meant to serve as a professional guide for the readers. This document has been prepared on the basis of publicly available
information, internally developed data and other sources believed to be reliable. The Sponsor, The Investment Manager, The Trustee or any of their respective directors,
employees, affiliates or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Whilst no
action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and opinions given fair and reasonable.
This information is not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument. Recipients of this information should rely on
information/data arising out of their own investigations. Readers are advised to seek independent professional advice and arrive at an informed investment decision before
making any investments. None of The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall be liable for
any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in this material.
The Sponsor, The Investment Manager, The Trustee, any of their respective directors, employees including the fund managers, affiliates, representatives including persons
involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities thereof, of company(ies) / specific
sectors mentioned herein.
Terms of issue and mode of sale and redemption of units: The Scheme will offer for Subscription/ Switch-in and Redemption / Switch-out of Units on every Business Day
on an ongoing basis, within five business days of allotment. The redemption or repurchase proceeds shall be dispatched to the unitholders within 10 Business Days from the
date f d
d t of redemption or repurchase.
ti h
Investor benefits and general services offered: The Scheme offers Systematic Investment Plan, Auto Switch facility, Online Transactions and Reliance Any Time Money
Card during the NFO period. The NAV of Scheme shall be published on a daily basis by the Mutual Fund at least in two daily newspapers and will also uploaded on the AMFI
site www.amfiindia.com and Reliance Mutual Fund site i.e. www.reliancemutual.com.
Statutory Details: Reliance Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882. Sponsor: Reliance Capital Limited.
Trustee: Reliance Capital Trustee Company Limited. Investment Manager: Reliance Capital Asset Management Limited (Registered Office of Trustee & Investment
Manager: “Reliance House” Nr. Mardia Plaza, Off. C.G. Road, Ahmedabad 380 006). The Sponsor, the Trustee and the Investment Manager are incorporated under the
Companies Act 1956 The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond their initial contribution of Rs 1 lakh towards the
1956. Rs.1
setting up of the Mutual Fund and such other accretions and additions to the corpus.
Risk Factors: Mutual Funds and securities investments are subject to market risks, and there is no assurance or guarantee that the objectives of the Scheme will
be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces
affecting the securities market. Reliance Small Cap Fund is only the name of the Scheme and does not in any manner indicates either the quality of the Scheme;
its future prospects or returns. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. The NAV of the Scheme may
be affected, interalia, by changes in the market conditions, interest rates, trading volumes, settlement periods and transfer procedures. There are various risks associated with
investing in Equities Bonds Foreign Securities investing and use of Derivatives Securitised Debt and Short Selling & Securities Lending For Scheme specific risk factors
Equities, Bonds, Securities, Derivatives, Lending.
and more details, please refer to the Scheme Information Document & Key Information Memorandum, which is available at all the DISC, Distributors and
www.reliancemutual.com. Investors can also call at our call centre 1800-300-11111 (toll free) for more details. Please read the Scheme Information Document and
Statement of Additional Information carefully before investing.

32. Thank You
A R C