Equity Buying Surges; Cash Holdings Decline: Mutual funds invested ₹56,979 crore in equities during August 2026, sharply higher than ₹11,698 crore in July, indicating a strong pick-up in equity deployment. Overall equity-oriented mutual fund cash holdings declined to ₹1.84 lakh crore in August from ₹1.92 lakh crore in July, reflecting increased deployment of available liquidity. With equity purchases significantly exceeding ₹29,329 crore of net equity fund inflows, fund managers appear to have deployed a portion of their existing cash reserves into equities.
AMC Cash Levels Decline Marginally in August: The average cash holding ratio across the top 20 AMCs declined to 4.49% in August from 4.66% in July, marking a 17 bps fall. The decline suggests a modest deployment of cash into equities, indicating slightly improved investment activity among fund houses while still maintaining adequate liquidity to manage market volatility and capitalize on emerging opportunities.
PPFAS Mutual Fund holds the highest cash-to-AUM ratio at 15.52%, with ₹23,876 Cr in cash, closely followed by Quant MF at 15.41% with ₹14,322 Cr. The elevated liquidity levels indicate a relatively cautious stance and provide greater flexibility to deploy capital as opportunities emerge.
In absolute terms, PPFAS MF holds the largest cash reserve at ₹23,876 Cr, followed by SBI MF with ₹21,864 Cr (2.75%), HDFC MF with ₹21,413 Cr (4.18%), and ICICI Prudential MF with ₹16,845 Cr (2.91%), highlighting sizeable liquidity buffers across the larger fund houses.
Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category at 9.35% of AUM (₹7,101 Cr), reflecting a cautious yet opportunity-driven approach, while Flexi Cap Funds hold the largest absolute cash pile of ₹42,849 Cr (7.00% of AUM), providing fund managers with significant flexibility for tactical deployment across market segments.
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