Mumbai, May 5 -- Large mutual funds in India are becoming more selective about investing in smaller stock market listings, making companies that seek to raise between Rs.400 crore to Rs.2,000 crore either wait out a volatile market or turn to private equity and venture capital firms for funds.

"There is clearly more selectivity. In the Rs.2,000-3,000 crore range, deals need sharper differentiation on growth, quality, and valuation to see strong traction," said Raghav Gupta, joint chief executive officer, IIFL Capital. He added that there is rising participation from family offices, high networth individual/ ultrahigh networth individual (HNIs/UHNI) investors, and alternative investment funds (AIFs) while select global long-only investors...