Why SEBI categories exist
Before 2017 a fund could call itself almost anything, so two funds with the same name could hold very different things. SEBI’s scheme categorisation fixed this: each fund must belong to one category, and each category has a minimum investment rule. That is why a Large Cap fund must keep at least 80% in large-cap stocks, and why it makes sense to compare it only with other Large Cap funds.
The categories sit in five broad groups: equity, debt, hybrid, solution oriented, and other schemes such as index funds and fund of funds.
The main categories and what they require
The tables show the mandate for each category and how many direct-plan funds sit in it in the Punji database today.
Equity (467 funds)
| Category | Funds | Mandate |
|---|---|---|
| Large Cap Fund | 35 | Min. 80% in large-cap stocks (top 100 companies by market cap). |
| Large & Mid Cap Fund | 36 | Min. 35% in large-cap and min. 35% in mid-cap stocks. |
| Mid Cap Fund | 34 | Min. 65% in mid-cap stocks (101st to 250th company). |
| Small Cap Fund | 36 | Min. 65% in small-cap stocks (251st company onwards). |
| Multi Cap Fund | 33 | Min. 25% each in large, mid and small-cap stocks. |
| Flexi Cap Fund | 46 | Min. 65% in equity across any market capitalisation. |
| Focused Fund | 28 | Min. 65% in equity, limited to a maximum of 30 stocks. |
| ELSS | 45 | Equity tax-saving scheme with a 3-year lock-in. |
| Sectoral/ Thematic | 174 | Min. 80% in a specific sector or theme. |
Debt (193 funds)
| Category | Funds | Mandate |
|---|---|---|
| Liquid Fund | 45 | Debt and money market instruments with maturity up to 91 days. |
| Overnight Fund | 40 | Overnight securities with maturity of 1 day. |
| Money Market Fund | 27 | Money market instruments with maturity up to 1 year. |
| Short Duration Fund | 35 | Macaulay duration of 1 to 3 years. |
| Corporate Bond Fund | 21 | Min. 80% in the highest-rated corporate bonds (AA+ and above). |
| Gilt Fund | 25 | Min. 80% in government securities. |
Hybrid (93 funds)
| Category | Funds | Mandate |
|---|---|---|
| Aggressive Hybrid Fund | 30 | 65-80% equity and 20-35% debt. |
| Balanced Hybrid Fund | 5 | 40-60% equity and 40-60% debt, no arbitrage. |
| Conservative Hybrid Fund | 21 | 10-25% equity and 75-90% debt. |
| Multi Asset Allocation | 37 | Min. 10% each in at least three asset classes. |
Other (545 funds)
| Category | Funds | Mandate |
|---|---|---|
| Index Funds | 385 | Replicates a specific index such as the Nifty 50. |
| FoF Domestic | 160 | Fund of funds investing in Indian mutual fund schemes. |
See Asset Class vs Category for the naming trap between the two levels of this classification.
How to use a category
A category is the fairest peer group for any comparison. Percentile ranks and the category median are always computed within a category, and a fund’s rank only means something against the same mandate. Comparing a Small Cap fund with a Large Cap fund compares different risks, not different managers.
Debt categories are defined by maturity or duration rather than by what they hold, and each debt fund also carries a Potential Risk Class that shows its credit and interest rate risk ceiling.
Frequently asked questions
Why did SEBI introduce fund categories?
To stop funds being marketed under names that did not describe what they held. Each category now has a defined mandate, so investors can compare like with like.
Can a fund change its category?
Only through a formal reclassification. A fund that no longer meets its category’s rules has to be brought back in line or moved to a different category.
How do categories help me compare funds?
By giving you a fair peer group. Rankings, medians and percentiles are only meaningful within a category, so always start by identifying a fund’s category.
WHAT THIS MEANS FOR YOU A category sets a minimum, not a guarantee of style. Two funds in the same category can still differ in concentration and approach. Use the category to decide which funds to compare, then look at risk, cost and consistency to choose among them.
METHODOLOGY Mandates as defined by SEBI’s categorisation of mutual fund schemes. Fund counts as of 2026-10-25, from the Punji fund database (D1 funds_v2, direct plans); the lists show the main categories, not every one SEBI defines. Not investment advice.