SBI Small & Midcap Fund will discontinue taking fresh subscriptions and systematic investment plans (SIPs) from investors from October 30. However, the scheme will continue to take money from existing investors.
Officials in the fund house said while filing the offer document with the market regulator, Securities & Exchange Board of India (Sebi), the fund house had stated that it would have capacity constrain of Rs 750 crore. Dinesh Kumar Khara, MD & CEO at SBI Asset Management Company (AMC), said: “We are nearing the target of Rs 750 crore and that is the reason we are not taking fresh money from investors. Apart from that, the market of mid and small cap is very limited and we want to remain true to our label of investments.”
Senior officials also said currently due to high valuations in mid- and small-cap stocks, it is not advisable to ask investors to put large sum of money into the volatile category. “It was possible for fund house to go to regulator and increase the capacity constrain. But they decided not to take fresh flows, which shows they are not able to get enough opportunity in stock selection. But, overall we believe it is a move which will benefit the end customer,” said a top officials from the fund house.