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MUMBAI - India's equity mutual funds recorded inflows in March after eight months of outflows, industry data showed on Thursday, as investors took advantage of a stock market correction to place bets on equities.

Mutual funds that invest in equity showed a net inflow of 91.15 billion rupees ($1.22 billion) in March compared with an outflow of 45.34 billion rupees in February, data published by the Association of Mutual Funds in India (AMFI) showed.

Indian stock markets touched record highs earlier this year in a rebound from a market crash that followed the spread of the coronavirus last year.

But key Indian market indices have fallen again as rising bold yields and a surge in coronavirus cases weighed on market sentiment. The benchmark S&P BSE Sensex lost as much as 8% during March from a peak it recorded in February, creating an opportunity for investors to pump in funds.

"It seems like equity investors waiting on the sidelines for a market correction have started making allocations taking a long-term investing view on equities," said Kaustubh Belapurkar, a director at investment research group Morningstar India.

Mutual funds investing in debt instruments, however, showed steep outflows in March, mainly as companies took out money to pay tax and other expenses as the financial year drew to a close, the AMFI data showed.

(Reporting by Abhirup Roy; Editing by Aditya Kalra and Jane Merriman)