Mid, Small Cap Shares Rally After SEBI Tweaks Norms For Multi Cap FundsPage Visited: 10
Mid- and small-cap shares rallied in trade on Monday after the market regulator Securities and Exchange Board of India (SEBI) tweaked norms for asset allocation for multi cap mutual funds. SEBI on Friday asked multi cap mutual funds o have a minimum corpus of 75 per cent invested in equities as against the present mandate of 65 per cent. The SEBI clarified that multi-cap funds must invest at least 25 per cent each in large cap, mid cap and small-cap stocks.
The Nifty Midcap 100 index surged as much as 3.32 per cent and Nifty Smallcap 100 index rallied as much as 5.56 per cent.
All the existing multicap funds will ensure compliance with the provisions within one month from the date of publishing of the next list of stocks by industry body Amfi (Association of Mutual Funds in India), that is January 2021, it added.
“In order to diversify the underlying investments of multicap funds across the large, mid and smallcap companies and be true to label, it has been decided to partially modify the scheme characteristics of multicap fund,” the Securities and Exchange Board of India (Sebi) said.
The move by SEBI came after it observed that some Multi Cap Schemes have skewed portfolios, with over 80 per cent of investment in large cap stocks akin to Large Cap schemes, and some Multi Cap schemes have near zero or insignificant asset allocation to small cap companies
Among the Midcap shares Syngene was top gainer, the stock rose 13.5 per cent. Mphasis, City Union Bank, Quess Corp, Ashok Leyland and Prestige Estates also rose between 8-10 per cent.
In the smallcap space, KPIT Technologies rose as much as 18 per cent. Indoco Remedies, Persistent Systems, MCX, Blue Star, Awanti Feeds and VIP Industries also rallied between 10-17 per cent.