NEW CATEGORIES of schemes and new benchmarks led to fund houses buying more of mid- and large-cap stocks, says a report The Sebi circular on categorisation and rationalisation of mutual fund schemes led to cash inflows into several small-cap funds drying up in an unprecedented portfolio overhaul, says a research note by brokerage Prabhudas Lilladher. The circular had sought to create uniformity in the mutual fund industry by setting clear definitions of large-cap, mid-cap and small-cap stocks. That would create specific categories of mutual fund schemes, where only one scheme is allowed per category. Small-cap stocks witnessed net selling of about ?22 crore (January-June). About ? 280 crore was sold in April 2018, while ?140 crore was sold even in June 2018. In the same period, ?21,900 crore worth of large-cap stocks were bought, while mid-cap stocks as per the changed definition reported net buying of ?14,500 crore. The tightening of norms meant that two categories — a new one