Month: January 2025

FIIs pulled out ₹44,396 crore from equity market in January 2025 due to: Strong US Dollar (Dollar Index > 109), Higher US bond yields (10-year yield > 4.6%) and Expectations of weak Indian corporate earnings

The Indian Rupee weakened, breaching ₹86 per dollar, marking a historic low.

Since Donald Trump’s re-election in November 2024, the Dollar Index has steadily strengthened, impacting emerging market currencies.

The Dollar’s rise highlights global confidence in the US economy amid limited Federal Reserve rate cuts and robust performance.

India’s forex reserves fell for six consecutive weeks, reaching $625.9 billion (10-month low as of January 10, 2025) primarily due to the Reserve Bank of India’s efforts to stabilise the rupee through dollar sales.

Banking system liquidity has remained in deficit since mid-December mainly driven by the Reserve Bank of India’s (RBI) interventions to stabilize the rupee, which have further widened the liquidity deficit.

To address the liquidity deficit, the RBI has implemented several measures, particularly during periods of heightened stress or currency market volatility. These include:

VRR Auctions: Regular Variable Rate Repo (VRR) auctions to inject liquidity and manage short-term imbalances.

50 bps CRR Cut: A 50 basis points reduction in the Cash Reserve Ratio (CRR) to 4% during the December policy meeting to inject additional liquidity into the banking system.

Open Market Operations (OMO): Purchase of government securities to inject liquidity and stabilize money markets.

Daily VRR Auctions: The RBI’s recent decision to conduct daily VRR auctions ensures tighter control over short-term rates and reaffirms its commitment to aligning overnight rates with the repo rate.

For the full report and detailed insights, click on the link below:

FPI Exodus Hits Financial Services Hard: ₹12,204 Crore Sell-Off – In the first half of January, FPIs intensified their sell-off in the Financial Services sector, accounting for nearly one-third of their total outflows, with ₹12,204 crore offloaded. Other sectors facing significant sell-offs included Consumer Services, Power, Capital Goods, Metals & Mining, Information Technology, Automobile & Auto Components and Construction.

Selective Buying: Focus on Textiles, Media, Chemicals – Amid a significant sell-off in the first half of January, FPIs made modest investments in select sectors, including Textiles, Media and Chemicals.

The US Factor: High Yields and a Strong Dollar– The driving force behind this exodus remains the attractive US bond yields, which have crossed 4.55%, offering safer and higher returns compared to emerging markets. Coupled with a robust dollar index staying above 108, the preference for US assets has further intensified the sell-off.

DIIs Keep Markets Afloat: ₹43,866 Crore Buying in January’s First Half – DIIs purchased stocks worth ₹43,866 crore during this period, bringing their total investments for the financial year to an impressive ₹4,61,976 crore, offering much-needed support to the markets. Domestic Institutional Investors (DIIs) sustained their buying streak in the first half of January, counterbalancing the heavy sell-off by FPIs.

For a comprehensive understanding and more insights, please go through our detailed report.

Equity Mutual Funds 2024: A Year of Resilience and Record-Breaking Growth

Equity Mutual Funds Soar in 2024 with 40% Net AUM Surge to ₹30.58 Lakh Cr – In 2024, equity mutual funds witnessed a phenomenal surge, with Net Assets Under Management (AUM) climbing 40.30% to ₹30.58 Lakh Cr.

Equity Mutual Funds Hit Record Inflows of ₹3.94 Lakh Cr in 2024 – Equity mutual fund inflows for 2024 reached an all-time high of ₹3.94 Lakh Cr, with October and December standing out as the months with the highest contributions.

Parag Parikh Flexi Cap Leads 2024 Equity Inflows as Top 10 Equity Schemes Capture 30% Share – In 2024, Parag Parikh Flexi Cap Fund emerged as the most popular equity scheme, attracting the highest inflows, followed by SBI Contra Fund and Motilal Oswal Midcap Fund. Despite nearly 500 equity schemes in the market, the top 10 funds captured over 30% of total inflows, exceeding ₹1.20 Lakh Cr. The top 15 funds secured more than 40%, amounting over ₹1.6 Lakh Cr, highlighting a strong investor preference for select, high-performing schemes.

Mid-Cap Moves – Among the top-traded mid-cap stocks, many schemes invested in companies such as OFSS, HPCL, Godrej Properties, Torrent Power and Bharat Forge. Meanwhile, several equity schemes chose to sell holdings in Coforge, Persistent Systems and Dixon Technologies.

Small-Cap Shifts – Among the most actively traded small-cap stocks, various equity schemes directed their investments towards companies such as Apollo Tyres, Nuvama Wealth Management, TBO Tek, Radico Khaitan and Kalpataru Projects International, while notable disinvestment occurred in MCX.

For a comprehensive understanding and more insights, please go through our detailed report.

The Mutual Fund industry’s average AUM reached a record ₹69.33 Lakh Cr in December, rising by 1.88% despite net outflows of ₹80,355 Cr, closing CY 2024 with a robust 35.70% AUM growth.

Equity-oriented schemes garnered ₹41,156 Cr in December, marking the second-highest monthly inflow ever and extending the streak of positive inflows to 46 months, the longest on record.

Sector/Thematic funds more than doubled their inflows to ₹15,332 Cr from ₹7,658 Cr, with all equity categories reporting positive net inflows for the third consecutive month in CY 2024.

SIP inflows reached an all-time high, surpassing ₹26,000 Cr for the first time and touching ₹26,459 Cr in December, up from ₹25,320 Cr in November.

Debt mutual funds witnessed a significant outflow of ₹1.27 Lakh Cr in December, reversing November’s inflows of ₹12,916 Cr, with liquid funds leading the outflows at ₹66,532 Cr.

CY 2024 ended on a positive note for debt funds, with a 22% rise in average AUM, reaching ₹16.98 Lakh Cr compared to ₹13.92 Lakh Cr in the previous year.

For an in-depth exploration, read through our comprehensive Mutual Fund Flow Report for December, 2024.

FPIs Bet on IT, Realty, Healthcare and More – In December, FPIs invested in Information Technology, Realty, Healthcare, Consumer Services, Capital Goods, Financial Services, Services and Construction sectors, signaling a cautious yet targeted approach amid broader market uncertainties.

FPI Record Selloff Hits Key Sectors: Oil & Gas, Auto and FMCG – In November, FPIs significantly reduced holdings across crucial sectors like Oil & Gas, Automobile & Auto Components, FMCG, Power, Consumer Durables, Construction Materials and Diversified. This widespread selloff underscores rising global uncertainties and intensifying market pressures.

DIIs Provide Market Cushion with ₹34,195 Cr Investment in December – Domestic Institutional Investors (DIIs) set a record in 2024 with net purchases exceeding ₹5.26 trillion, breaking the ₹2.8 trillion annual investment record from 2022.

Mutual Funds’ Record-Breaking ₹4.34 Trillion Investment in 2024 – Mutual Funds led the charge in record-breaking DII investment, contributing ₹4.34 trillion out of the ₹5.26 trillion total in 2024. In December, they bolstered the Indian equity markets with an investment of ₹28,138 Crs, cementing their role as a market stabilizer.

FPIs Spark Record-Breaking Debt Market Investment in 2024 – FPIs poured ₹12,512 Cr into the Indian debt market in December. Cumulative FPI debt investment surged to ₹1,52,775 Cr, marking an all-time high for Indian debt markets. This milestone surpasses the previous record of ₹1,48,808 Cr set in 2017.

For a comprehensive understanding and more insights, please go through our detailed report.

Mutual Fund Average AUM Rises 3.6% in Oct-Dec 2024, Ends 2024 with a Spectacular 39% Growth!

Quant Mutual Fund Sees AAUM Decline: Quant Mutual Fund stands out as the only fund to report a decline in Average AUM during the last quarter.

Mutual Funds on the Rise: Despite market corrections in the October-December quarter, the average AUM rose by 3.6% to ₹68.62 Lakh Cr. The mutual fund industry posted an impressive 39.39% growth in 2024, powered by record SIP inflows and a surge in New Fund Offers(NFOs).

SBI MF AAUM Crosses ₹11 Lakh Cr : SBI Mutual Fund’s Average Assets Under Management (AAUM) reached a new milestone, crossing ₹11 lakh crore in the last quarter. Strengthening its industry leadership, the fund house has retained its top position for the 20th consecutive quarter, reflecting unwavering investor trust and sustained excellence.

Mutual Fund Rankings Remain Unshaken: The mutual fund landscape showcases remarkable stability, with the top eight and top three firms holding their ranks for 14 consecutive quarters. Notably, the top 10 Asset Management Companies (AMCs) have retained their positions, underscoring a period of consistent dominance within the industry.

ICICI Mutual Fund Leads Absolute Growth: In the latest quarter, ICICI Mutual Fund emerged as the top gainer in absolute average AUM growth, followed by HDFC and Nippon India Mutual Fund. This surge highlights the fierce competition and dynamic growth fueling the mutual fund industry.

Rising Stars in Mutual Funds: Invesco, Groww, Old Bridge, Helios, JM Financial and Navi Mutual Fund have climbed the mutual fund rankings, showcasing significant progress over previous quarters.

Top 10 AMCs Drive Industry Growth: The top 10 Asset Management Companies (AMCs) have been instrumental in the mutual fund industry’s stellar performance, accounting for a remarkable 77% of the Average AUM growth this past quarter.

Top Percentage Growth Performer: In the last quarter, Motilal Oswal, Old Bridge, Groww, Zerodha and Helios Mutual Funds recorded impressive percentage growth in Average AUM, marking remarkable progress compared to previous quarters.

For a comprehensive understanding and more insights, please go through our detailed report.

Market Cap Cutoffs Rise in Latest Stock Categorization :- In the recent stock categorization, the Large Cap cutoff for average market cap over last 6 months has risen to ₹1 lakh Cr from ₹67,000 Cr. Similarly, the Mid Cap cutoff for average market Cap has increased to ₹33K Cr from ₹22K crore.

AMFI’s Latest: 11 Stocks Elevated to Large Cap :- In the latest AMFI stock categorization, eleven notable stocks have been elevated from the Mid Cap to the Large Cap category including recent IPO giants Hyundai, Swiggy, Bajaj Housing Finance, and NTPC Green as direct entries. Other notable upgrades include CG Power, Cummins India, Polycab, Indus Towers, Rail Vikas Nigam, ICICI Pru Life and Info Edge.

Key Downgrades: 11 Stocks Move from Large Cap to Mid Cap :- In the recent reclassification, Adani Total Gas, Apollo Hospitals, BHEL, Canara Bank, IDBI Bank, IndusInd Bank, Jindal Steel, Union Bank, NHPC, Shree Cements and Mankind Pharma have moved from the Large Cap to the Mid Cap category.

Stock Upgrades and Downgrades: Small Cap to Mid Cap Shifts :- In the latest reclassification, 9 stocks have been upgraded from Small Cap to Mid Cap. Meanwhile, 13 stocks have been downgraded from Mid Cap to Small Cap.

For a comprehensive understanding and more insights, please go through our detailed report.

As we step into 2025, let’s reflect on the trends and milestones that shaped the markets last year:

10-Year G-Sec Yields: Declined by 42 bps, driven by fiscal deficit control, FPI inflows, and speculation around monetary easing.

Volatile Liquidity: India’s banking system faced fluctuations due to seasonal tax flows, government spending, and global economic factors.

CPI Inflation: Averaged 5% (Jan–Nov), hitting a 59-month low in July before rising towards the year-end.

Forex Reserves: Reached a record $704.89 billion before declining to $644.39 billion by December.

Indian Rupee Hits Record Low: Depreciated by 3%, pressured by a strong US Dollar and widening trade deficits.

Gold’s Rise: Outperformed all major asset classes, reaching ₹79,362/10g, with projections to soar further in 2025.

Global Market Trends: Slowing growth in emerging economies like India and China. Nasdaq surged 28.6%, while the FTSE 100 lagged at 5.69%.

Monetary Policy Expectations for 2025: Central banks globally are expected to adopt a cautious approach, with the RBI and others likely to ease rates in response to evolving economic conditions.

Best Performing Mutual Fund schemes of 2024: Let’s look into top-performing mutual fund schemes across categories in the report attached.

For the full report and detailed insights, click on the link below: