Month: September 2025

September Fortnight Review: DIIs and MFs Lead Buying Against FPI Exit Pressure

FPI Selling Concentrated in Consumer & Power – FPIs executed sharp exits from Consumer Services (₹3,246 Cr) and Power (₹2,107 Cr), followed closely by Information Technology (₹2,014 Cr) and Realty (₹1,927 Cr). Additional pressure came from Healthcare (₹1,601 Cr), Telecommunication (₹1,505 Cr) and Oil & Gas (₹1,502 Cr), while moderate selling was seen in Construction Materials (₹1,193 Cr). The selling pattern highlights a clear retreat from consumption-heavy and defensives.

FPI Buying Anchored in Autos, Financials & Capital Goods – On the buying side, FPIs favored cyclical and growth-linked sectors, led by Automobile & Auto Components (₹1,908 Cr), Financial Services (₹1,634 Cr) and Capital Goods (₹1,518 Cr). Strong inflows also went into Metals & Mining (₹1,394 Cr), while modest accumulation was noted in Services (₹236 Cr), Construction (₹130 Cr) and Chemicals (₹23 Cr). The trend reflects a preference for sectors aligned with India’s domestic growth momentum and infrastructure cycle.

FPIs Extend Equity Selloff in September: Foreign Portfolio Investors (FPIs) continued exiting Indian equities in the first half of September, extending the selloff seen in July and August. However, the pace of outflows has moderated, with net withdrawals of ₹9,759 Cr so far this month, led by ₹10,175 Cr in secondary market selling, partly offset by ₹416 Cr in IPOs. If the trend persists, September will mark the sixth month of equity outflows in 2025, highlighting sustained caution among global investors.

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

Market Correction Drags Down MFs AUM in August: Equity MFs net AUM slipped 0.58% to ₹33.09 Lakh Cr in August from ₹33.28 Lakh Cr in July, while the overall mutual fund industry’s net AUM dipped 0.23% to ₹75.19 Lakh Cr. The decline came despite good inflows and near-record SIP contributions, as moderate market corrections weighed on valuations, ultimately capping overall asset growth.

MFs Eye Fresh Opportunities in Select IPOs: Equity mutual funds displayed strong primary-market appetite, allocating selectively to newly listed companies. Major IPO allocations included Vikram Solar (20 schemes; 2.74%), JSW Cement (19 schemes ; 4.91%), Aditya Infotech (17 schemes; 4.59%) and Bluestone Jewellery & Lifestyle, highlighting investor enthusiasm for fresh listings.

Mutual Funds Expand Portfolios with New Stock Additions: Schemes actively bought into Eternal, Clean Science & Technology, One97 Communications, Sai Life Sciences, InterGlobe Aviation, Hyundai Motor, FSN E-Commerce, Apollo Hospitals, PB Fintech and Delhivery, showcasing a broader push into technology, healthcare, auto, consumer services and financial platforms.

Funds Restructure Portfolios with Targeted Exits: On the sell side, mutual funds trimmed or exited Siemens Energy India, ABB India, PNB Housing Finance, PG Electroplast, Suzlon Energy, Hindalco, Shriram Finance, BSE, Divi’s Laboratories, SBI Cards, Eicher Motors and Prestige Estates, signalling strategic portfolio realignment.

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

Record Buying – Equity MFs Deploy Cash Aggressively: Equity mutual funds pared down their cash reserves to ₹1.98 Lakh Cr in August 2025 from ₹2.07 Lakh Cr in July, marking a clear shift towards active deployment. The cutback coincided with the calendar year’s highest monthly equity purchases of ₹64,889 Cr, underscoring fund managers’ conviction to seize opportunities created by sharp FPI selling. The move highlights a strategy of utilizing existing liquidity to strengthen market positioning.

AMC Cash Ratio Dips After July Uptick: The average cash holding ratio among the top 20 AMCs slipped to 4.82% in August, after rising to 5.94% in July and continues to stay well below the 5% mark.

PPFAS MF continues to maintain the highest cash-to-AUM ratio at 22.33% (₹26,926 Cr), highlighting its highly cautious stance. Quant MF follows with a sizable 10.72% (₹9,035 Cr), while HDFC MF holds 6.30% (₹26,494 Cr), staying well above the industry average in liquidity.

Parag Parikh & SBI Contra Lead in Cash Proportion: Parag Parikh Flexi Cap Fund continues to top the list with 22.71% of AUM in cash (₹26,129 Cr), followed closely by SBI Contra Fund at 21.57% (₹10,064 Cr), underscoring a strong liquidity stance. HDFC Flexi Cap Fund holds 11.38% (₹9,327 Cr), signalling ample readiness to deploy funds when valuations turn attractive.

Contra & Flexi Cap Funds Lead the Cash Pile: Contra Funds continue to hold the largest liquidity cushion with 16.38% of AUM in cash (₹11,486 Cr), reflecting a highly defensive stance. Flexi Cap Funds follow with 9.70% (₹48,106 Cr), indicating fund managers’ preference to keep ample dry powder to deploy during market volatility.

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

Growth Momentum Cools: Mutual Fund industry’s Average AUM eases 0.38% to ₹76.71 lakh crore in August, retreating from July’s record peak.

Equity Flows Moderate: Inflows slip 22% MoM to ₹33,430 crore, yet equity funds log their 54th straight month of gains.

Midcaps Shine Bright: Mid Cap funds hit record inflows, while Flexi Cap and Small Cap categories stay in strong demand.

Hybrid Spotlight: Arbitrage funds lead with ₹6,667 crore inflows; Multi Asset Allocation funds also see robust traction.

Bullion Beckons: Gold ETF inflows surge to a 7-month high of ₹2,190 crore; silver ETFs hold steady at ₹1,760 crore.

Debt Turns Weak: Debt funds face ₹7,980 crore outflows; Liquid funds reverse sharply with a ₹13,350 crore pullout.

For more details read through our comprehensive Mutual Fund Flow Report for August, 2025.

August Snapshot: FPIs Extend Equity Selloff, DIIs and MFs Lead with Strongest Monthly Inflows of 2025

August’s Sectoral Moves: FPIs Cut Financials & Information Technology

• Financials & IT Lead the Sell-Off: FPIs pared down positions heavily in Financial Services (₹23,288 Cr) and Information Technology (₹11,285 Cr), the hardest-hit sectors in August. Financials saw outflows of ₹13,471 Cr in the first half and ₹9,817 Cr in the second, while IT recorded ₹6,380 Cr selling early in the month and ₹4,905 Cr in the latter half.
• Oil, Power & Consumer Plays Under Fire: Selling pressure also extended to Oil & Gas (₹6,108 Cr) and Power (₹4,066 Cr), while Consumer Durables (₹1,969 Cr), Healthcare (₹1,417 Cr), Realty (₹1,245 Cr) and FMCG (₹1,097 Cr) witnessed moderate but steady exits.

Selectively Buy Domestic Plays: Telecom & Autos Attract Inflows

• Telecom & Autos Emerge as FPI Favorites: FPIs placed big bets on Telecommunication, emerging as the top buy with ₹5,766 Cr of net inflows. Interestingly, flows were sharply front-loaded, with a massive ₹7,446 Cr infusion in the first half, partly offset by profit booking of ₹1,680 Cr in the second. The Automobile sector also saw renewed interest, ending August with ₹1,803 Cr of net buying—despite a weak start marked by ₹814 Cr of outflows in the first half, FPIs turned strong buyers with ₹2,617 Cr in the latter half, underscoring confidence in India’s domestic demand story.
• Broader Domestic Bets Gain Traction: FPIs also bought into Construction Materials (₹2,475 Cr), Services (₹2,351 Cr) and Capital Goods (₹1,896 Cr), showing selective optimism, while Chemicals (₹1,571 Cr), Construction (₹1,356 Cr) and Media & Entertainment (₹165 Cr) added to diversified domestic bets.

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