SEBI Chairperson Madhabi Puri Buch stated on February 21 that the market regulator does not find it necessary to comment on small- and mid-cap valuations at this stage, especially after these indices have declined 20 percent from their peaks. This comes almost a year after she had flagged concerns about “irrational exuberance” in the broader markets.
Speaking at the event organized by AMFI in Mumbai, Buch mentioned that in 2024, the concerns were raised by SEBI when the same was required. In February 2024, the asset management companies (AMCs) were proposed by SEBI to introduce the policies to protect the investor in the small-cap and the mid-cap segments because the market in the same segments overheated.
In March 2024, Buch had cautioned that while some enterprises were getting rightly re-rated, others existed in which the parameters of the valuation appeared to be inflated and disconnected from the fundamentals. This was labeled irrational exuberance by the regulators.
The small- and mid-cap surge in 2024 picked up speed from a strong market trend, and Sensex went up to near 86,000 in September. BSE Mid-cap and Small-cap indices went up by nearly 30 percent in the last year before posting a steep downfall in the later half in sync with the overall market declines.
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Source: Moneycontrol
News Desk
