Kotak Mutual Fund has moved SEBI to reclassify its existing Kotak Standard Multi Cap with asset under management of ₹33,000 crore to newly formed flexi category.

The multi-cap fund has hogged limelight ever since market regulator SEBI had issued new norms in September. The new norms had mandated the existing multi-cap funds to invest a minimum of 25 per cent each in large-, mid- and small-cap stocks. All the existing multi cap funds should ensure compliance with the new norms by January-end, a month after the Association of Mutual Funds of India publishes the new categorised stock list, said SEBI in its circular.

On November 6, SEBI has introduced a new ‘flexi cap category’ for mutual funds, which can invest at least 65 per cent of the corpus in equity but will have no restrictions on investing in large-, mid- or small-cap company stocks.

Harsha Upadhayaya, Chief Investment Officer (Equity), Kotak Mahindra Asset Management Company said the fund house has applied to SEBI for converting Kotak Standard Multicap Fund into a flexi cap fund, a couple of weeks back and waiting for approval.

Once approved by SEBI, Kotak Mutual Fund has to provide mandatory 30 days exit route for investors in Multi Cap fund without any exit load or charges. Multi-cap fund has been seeing a steady outflow since June as most investors preferred to book profit as market rallied. Multi-cap fund had registered an outflow of ₹8,077 crore in last six month.

The fund last recorded a positive inflow of ₹759 crore in May. Despite the outflow, the asset under management of multi-cap increased 26 per cent to ₹1.60 lakh crore last month from ₹1.27 lakh crore in May.