Seven leading Indian mutual funds—including HDFC, SBI and Kotak—reduced positions in 20 smallcaps during September amid rich valuations and volatile inflows. Cuts spanned Amber Enterprises, Rategain, Bikaji Foods, and others; several exits were complete, per broker tallies. The rebalancing followed an August pullback and softer September inflows into small-cap schemes, even as overall SIPs remained resilient. Managers cited prudence after a powerful multiquarter rally, shifting toward quality and liquidity while retaining selective smallcap bets with durable earnings visibility.