Amfi writes to MFs about Sebi concern over froth in small, mid caps space
₹2.47 trillion worth of investor assets, and small-cap funds account for ₹2.9 trillion of investor assets. In the last 12 months, mid-cap funds have garnered net inflows to the tune of ₹24,971 crore, while small-cap funds have got net inflows of ₹44,288 crore, according to data from Amfi.
In the past, certain small-cap funds have limited inflows amid concerns of expensive valuations in the segment. For example, SBI Small Cap Fund had stopped accepting lumpsum inflows in 2020.
Last year, Tata Small Cap Fund had stopped accepting lumpsum inflows. Valuations in the small cap space has been a concern even recently.
The Nifty Smallcap 250 Index is trading at a one-year forward price-to-earnings (PE) multiple of 28 times, while its long-term average PE multiple is at 22. This week, Kotak Small Cap Fund announced its decision to restrict inflows.
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