Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | AMFI Registered MF Distributor | ARN-0158
Equity Buying Remains Strong Amid Market Correction: Mutual funds invested ₹53,887 Cr in equities during September 2026, slightly lower than ₹56,979 Cr in August, reflecting continued strong equity deployment despite a sharp market correction. Overall, equity-oriented mutual fund cash holdings edged up to ₹1.85 lakh Cr in September from ₹1.84 lakh Cr in August, indicating broadly stable liquidity reserves. Despite benchmark indices correcting sharply, with the Nifty falling over 6% in September, fund managers continued to deploy capital into equities, suggesting sustained buying interest amid market weakness.
AMC Cash Levels Rise Marginally in September: The average cash holding ratio across the top 20 AMCs increased to 4.59% in September from 4.49% in August, marking a 10 bps rise. The increase was partly driven by the sharp correction in equity valuations, despite strong equity inflows and continued equity buying by mutual funds. This suggests that fund houses maintained relatively stable liquidity buffers while actively deploying capital amid market volatility and emerging investment opportunities.
Highest Cash Allocation – Quant & PPFAS: Quant & PPFAS: Quant Mutual Fund holds the highest cash-to-AUM ratio at 16.49%, with ₹15,048 Cr in cash, followed by PPFAS MF at 14.33% with ₹21,681 Cr. These elevated liquidity levels indicate a relatively cautious stance and provide greater flexibility to deploy capital as investment opportunities emerge.
Parag Parikh Flexi Cap Fund Leads in Absolute Cash Holdings: Parag Parikh Flexi Cap Fund holds the largest cash reserve at ₹21,186 Cr (14.60% of AUM), followed by HDFC Mid Cap Fund at ₹8,417 Cr (8.26%) and SBI Small Cap Fund at ₹5,993 Cr (14.60%), highlighting significant liquidity buffers among leading equity schemes.
Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category at 7.31% of AUM (₹5,233 Cr), reflecting a cautious yet opportunity-driven approach, while Flexi Cap Funds hold the largest absolute cash reserve of ₹40,001 Cr (6.79% of AUM), providing fund managers with significant flexibility for tactical deployment across market segments.
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