Month: June 2026

June Fortnight Review: FPIs Risk-Off; DIIs & MFs Absorb Selling Pressure

FPI Selling: Financial Services, Oil & Gas and Auto Lead Outflows  – During 1st–15th June 2026, FPI selling remained broad-based and concentrated across key large-cap sectors. Financial Services saw the highest outflow of ₹11,263 Cr, making it the biggest drag during the fortnight. Selling was also heavy in Oil & Gas at ₹10,488 Cr, followed by Automobile at ₹9,044 Cr, Information Technology at ₹6,733 Cr, FMCG at ₹5,063 Cr, Metals & Mining at ₹4,722 Cr, Healthcare at ₹4,501 Cr and Capital Goods at ₹2,586 Cr. This indicates that FPIs continued to reduce exposure across financials, energy, autos, IT and consumption-oriented sectors.

FPI Buying: Inflows Remain Very Selective – On the buy side, FPI activity remained highly selective, with modest buying led by Telecommunication, which attracted inflows of ₹373 Cr. Services also saw inflows of ₹302 Cr, while Utilities witnessed marginal buying of ₹7 Cr. Overall, FPI flows during the first half of June remained clearly risk-off, with broad-based selling outweighing limited sector-wise buying.

FPIs Stay Risk-Off in First Half of June: Historic FPI equity selling deepened in June, with FPIs recording outflows of ₹63,450 Cr during 1st–15th June 2026, marking the fourth consecutive month of equity outflows. The selling was mainly driven by the secondary market, where FPIs sold ₹64,268 Cr, while primary market/IPOs saw modest inflows of ₹819 Cr, indicating continued caution toward listed equities.

DII Buying Remains Robust: Domestic Institutional Investors continued their strong buying momentum in the first half of June 2026, with net equity purchases of ₹61,137 Cr during 1st–15th June. For CY2026 till 15th June, DIIs have invested a strong ₹4,45,474 Cr in Indian equities, reinforcing their role as the key stabilising force amid continued FPI selling pressure.

MF Equity Buying Remains Strong: Mutual Funds remained major buyers within the domestic institutional segment, investing ₹42,725 Cr in equities during 1st–15th June 2026. On a CY2026-to-date basis, MFs have invested ₹2,88,929 Cr in equities, highlighting sustained domestic investor participation through mutual fund channels. 

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

Equity MF AUM Inches Higher Even as Overall Industry AUM Declines: Equity mutual funds’ Net AUM recovered in May, rising 1.10% MoM to ₹36.14 lakh crore from ₹35.74 lakh crore in April, supported by gains in the broader equity market. In contrast, the overall mutual fund industry Net AUM declined 0.42% MoM to ₹81.58 lakh crore, weighed down by softer equity inflows and sharp outflows from debt-oriented schemes.

MFs Add Fresh Exposure Across New-Age, IPO, Power, Industrials and Consumer Names: Equity mutual funds added fresh positions in a diversified set of stocks led by Billionbrains Garage Ventures, Lenskart Solutions, OnEMI Technology Solutions and JSW Energy, reflecting selective interest across new-age digital platforms, consumer-tech, IPO-led opportunities and power. Incremental additions were also visible in ABB India, Adani Energy Solutions, Dixon Technologies, Bharti Airtel, Crompton Greaves, BSE, InterGlobe Aviation, BEL, CG Power, Sai Life Sciences and HAL, indicating broad-based accumulation across industrials, power transmission, electronics, telecom, exchanges, aviation, defence and pharma.

MFs Exit Lupin, Kotak Bank, SBI, PSU Banks and Auto Names Amid Portfolio Rotation: On the exit side, Several schemes exited exposure to Lupin, State Bank of India, Bank of Baroda and Canara Bank, indicating portfolio reshuffling across pharma and banking names. Other notable exits were seen in Godrej Consumer, TVS Motor, Tata Motors, Eternal, Jubilant FoodWorks, Hero MotoCorp, ITC, Indian Bank, Shriram Finance and Ashok Leyland, reflecting churn across consumption, auto, FMCG, QSR and financials.

Lenskart, Billionbrains, JSW Energy & PB Fintech Lead MF Buying; BFSI, Auto and Energy Names Also Attract Net Adds: In the Top 20 traded stocks, equity mutual funds recorded the strongest net additions in Lenskart Solutions, Billionbrains Garage Ventures, JSW Energy and PB Fintech, reflecting strong accumulation across new-age consumer platforms, digital businesses, power and fintech. Buying interest was also visible in Adani Energy Solutions, Eternal, TVS Motor, ICICI Bank, Samvardhana Motherson, Kotak Mahindra Bank and HDFC Bank, indicating steady allocation toward power transmission, consumption, automobiles, auto ancillaries and large private banks.

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

Equity Buying Accelerates in May: Mutual funds stepped up equity deployment in May 2026, with net equity purchases of ₹63,087 crore, providing strong domestic support despite continued FPI selling. Overall equity-oriented MF cash holdings declined to ₹1.88 lakh crore from ₹1.98 lakh crore in April, suggesting that fund managers used the mild market correction to deploy cash and add equities even as equity MF inflows hit a one-year low.

AMC Cash Levels Ease, but Caution Persists: The average cash holding ratio across the top 20 AMCs eased to 4.79% in May, down from 5.03% in April, as equity-oriented AUM continued to expand and fund managers deployed cash amid improving market conditions. With cash levels slipping below the 5% mark, the trend suggests a sustained risk-on stance and a preference to remain more fully invested, while still maintaining sufficient liquidity to navigate market volatility and capitalize on emerging opportunities.

PPFAS Mutual Fund continues to hold the highest cash-to-AUM ratio at 17.67%, with ₹26,104 Cr in cash, reflecting a distinctly defensive stance and ample flexibility for future deployment. Quant MF follows with a sizeable 13.89% cash holding (₹12,182 Cr), while DSP MF (6.90%) and Axis MF (6.79%) also maintain relatively elevated cash buffers, indicating a cautious yet opportunity-driven investment approach.

Flexi Cap Funds Lead in Absolute Cash Stash: Parag Parikh Flexi Cap Fund holds the largest cash buffer at ₹25,652 Cr, with cash accounting for 18.14% of AUM, reflecting a defensive yet opportunity-ready stance. HDFC Flexi Cap Fund follows with ₹7,458 Cr in cash (7.32% of AUM), indicating ample liquidity for tactical deployment as market opportunities evolve.

Contra & Flexi Cap Funds Continue to Lead Cash Holdings: Contra Funds remain the most cash-heavy category with an 11.29% cash-to-AUM ratio and ₹8,155 Cr in cash, reflecting a cautious yet opportunity-driven stance. Flexi Cap Funds follow with 8.16% cash holdings or ₹46,079 Cr, highlighting their ability to dynamically allocate across market segments as opportunities arise.

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

The mutual fund industry sustained its momentum in May 2026, with Average AUM rising to ₹83.46 lakh crore from ₹81.94 lakh crore in April, even as total net outflows of ₹64,021 crore were recorded during the month, largely driven by heavy debt redemptions.

Equity-oriented inflows fell to a one-year low of ₹22,908 crore in May. Flexi-cap, Small-cap and Mid-cap funds continued to lead, though all three saw meaningful deceleration from April’s elevated levels.

Hybrid inflows halved to ₹10,560 crore, largely on account of a sharp moderation in Arbitrage fund flows.

Passive fund inflows fell sharply in May, with Index Funds and ETFs pulling back significantly from April’s levels. Gold ETFs turned net negative for the first time in 13 months.

Debt mutual funds recorded a net outflow of ₹96,949 crore, sharply reversing April’s all-time high inflow — driven by seasonal advance tax outflows and a tightening in banking system liquidity that pushed short-term rates higher.

SIP contributions remained broadly stable at ₹30,954 crore, easing marginally from April’s ₹31,115 crore, continuing to reflect the resilience of retail investor participation.

Overall, May 2026 reflects a seasonal liquidity-driven correction in debt flows, while equity and SIP momentum — though moderating — remain structurally intact, keeping industry AUM on an upward trajectory.

May 2026: FPIs Remain Equity Sellers, Debt Flows Turn Positive; DIIs & MFs Provide Strong Market Support

May 2026 Sectoral Rotation: Financials & Oil & Gas Face Heavy FPI Selling; Services and Metals & Mining See Selective Buying

Financial Services Leads the Selloff; Oil & Gas and FMCG Also Remain Under Pressure: On the selling side, Financial Services remained the biggest drag by a wide margin, witnessing outflows of ₹23,141 Cr in May 2026. Selling was heavily front-loaded, with FPIs selling ₹17,960 Cr during 1st–15th May, while outflows moderated to ₹5,181 Cr during 16th–31st May, indicating some easing in pressure during the second half.

Oil & Gas saw the second-highest selling at ₹8,978 Cr, followed by FMCG at ₹3,561 Cr and Automobile at ₹2,532 Cr. Among other sectors, Consumer Services ₹1,995 Cr, Information Technology ₹1,911 Cr, Construction Materials ₹1,641 Cr and Consumer Durables ₹1,449 Cr also witnessed outflows, indicating broad-based FPI caution across both cyclical and defensive sectors.

Services and Metals & Mining Emerge as Key Buying Pockets: FPI buying in May 2026 remained selective, with Services leading inflows at ₹7,204 Cr, largely driven by strong buying of ₹7,019 Cr in the first half of the month. Metals & Mining followed closely with inflows of ₹6,697 Cr, with buying strengthening sharply in the second half at ₹4,999 Cr, indicating renewed interest in the sector. Capital Goods also remained a preferred sector, attracting inflows of ₹2,799 Cr, mainly supported by buying of ₹2,645 Cr in the first half. Healthcare saw marginal inflows of ₹183 Cr, as second-half buying of ₹601 Cr offset first-half selling of ₹418 Cr.

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