Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch said that there is “no need” for the capital markets regulator to make an official statement regarding the recent major correction in small and midcap stocks. "On mid-caps and small-caps, I think that at the point in time when the regulator felt the need to make a statement about it, the statement was made. Today, the regulator feels no need to make an additional statement," she said during an event held by the Association of Mutual Funds in India (AMFI).

The media asked her about her earlier remarks regarding some froth in the market on the mid-cap and small-cap sides and Sebi's view on whether that froth is out or not. In her remarks in March 2024, the Sebi chief had said it might not be good to allow the froth to keep building.

In recent days, small and midcap stocks have seen a significant selloff, with some stocks seeing a more than 20% fall. However, this week, small and midcap stocks have regained up to 5%.

However, despite the recent downturn, data from the Association of Mutual Funds in India (AMFI) reveals that investor interest in small-cap funds remains robust. In January 2025, inflows into small-cap funds rose by 22.6% month-over-month, totaling ₹5,720.87 crore compared to ₹4,667.70 crore in December 2024.

In an interaction with Fortune India this month, ace investor Vijay Kedia had also said the Indian share market was in consolidation phase and expects another 3-4% correction in near-term. “The domestic market has been rising for the past three to four years and now it is in a reaction mode. The market will keep on consolidating somewhere here and there. I don't think this budget will take market to new height,” Kedia said.

The Association of Mutual Funds in India (AMFI), meanwhile, today launched three strategic initiatives: Small SIP (Sachetization of Mutual Funds), Tarun Yojana, and MITRA (Mutual Fund Investment Tracing and Retrieval Assistant). These initiatives aim to advance financial inclusion, promote investor awareness, and simplify the process of tracing and retrieving forgotten investments.

India’s mutual fund industry has witnessed robust growth, with assets under management (AUM) surpassing ₹65 lakh crore but a significant portion of the population still remains outside the formal investment ecosystem due to several barriers.

Sebi chief Buch underscored the importance of financial inclusion and investor protection in fostering a resilient capital market. “Investor participation is key to deepening and broadening India's financial markets. AMFI’s initiatives will not only encourage more individuals to start investing but will also provide essential tools to ensure transparency, security, and ease of access to mutual fund investments.”

The Small SIP introduces a ₹250 Systematic Investment Plan (SIP), designed to make mutual fund investing more accessible, particularly for first-time investors and those from underserved segments. The Tarun Yojana seeks to integrate financial literacy into school curricula, equipping young minds with foundational knowledge of investment principles. The MITRA platform addresses a long-standing challenge by enabling investors and their legal heirs to identify and recover inactive or forgotten mutual fund holdings, ensuring rightful asset ownership.