SEBI came out with new guidelines last evening where Equity Multi-Cap Funds now compulsorily need to invest at least 25% of their corpus in “Mid Caps” (firms ranked between 101-250 in pecking order of Market Cap) and another 25% in “Small Caps (firms ranked 251 or higher in pecking order of Market Cap). This needs to be achieved by 31 Jan 2021.
In this note we want to address the following issues
a) How did SEBI get here?
b) Our view on this order
c) What this order means for Small and Mid-Caps in the short term?Read More