A day after Sebi chairperson Madhabi Puri Buch pointed out that there is froth formation in the market, ICICI Prudential Mutual Fund has issued a circular stopping lum-sum investment in its small and mid cap funds starting March 14.
The fund house said it will still accept investment in form of Systematic Investment Fund (SIP) and Systematic transfer plans (STP) but, with a limit of ₹2 lakh PAN level per month per scheme.
ICICI is not the first fund house to put a stop on lump-sump investment in small cap, prior to this Nippon, Tata and SBI MFs also stopped taking such investment in small cap funds. But, ICICI is the first to put a pause on lump-sump investment in mid cap funds as well.
The restrictions were implemented one day after Sebi chairperson Madhabi Puri Buch highlighted the risk of potential "froth" or "bubbles" in a market traditionally favored by retail investors.
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