Month: November 2026

Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | AMFI Registered MF Distributor | ARN-0158

Equity Buying Declines; Cash Holdings Fall as Mutual Funds Continue Deployment: Mutual funds invested ₹39,251 crore in equities during October 2026, down 18.2% from ₹47,967 crore in September, indicating moderation in equity purchases. Meanwhile, equity-oriented mutual fund cash holdings declined to ₹1.75 lakh crore in October from ₹1.83 lakh crore in September, reflecting continued deployment of available liquidity. With equity purchases exceeding ₹32,994 crore of net equity fund inflows, fund managers appear to have utilised a portion of their existing cash reserves to support equity investments.

AMC Cash Holdings Decline in October as Fund Managers Deploy Liquidity: The average cash holding ratio across the top 20 AMCs declined to 4.25% in October from 4.59% in September, a reduction of 34 bps. Despite moderating equity inflows and lower mutual fund equity purchases, the decline suggests continued deployment of cash reserves amid the broader market correction. Cash-heavy fund houses, including Quant MF and PPFAS MF, also reduced their cash allocations significantly, indicating selective buying opportunities at lower market valuations.

Quant Mutual Fund holds the highest cash-to-AUM ratio at 13.24%, with ₹11,659 Cr in cash, closely followed by PPFAS MF at 13.12% with ₹20,096 Cr. The elevated liquidity levels indicate a relatively cautious stance and provide fund managers with greater flexibility to deploy capital as attractive opportunities emerge.

Parag Parikh Flexi Cap Fund Leads in Absolute Cash Holdings: Parag Parikh Flexi Cap Fund holds the largest cash reserve at ₹19,559 Cr (13.33% of AUM), followed by HDFC Mid Cap Fund at ₹6,928 Cr (6.88%) and SBI Small Cap Fund at ₹6,320 Cr (16.12%).

Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category at 9.15% of AUM (₹6,634 Cr), reflecting a cautious yet opportunity-driven approach, while Flexi Cap Funds hold the largest absolute cash pile of ₹36,526 Cr (6.17% of AUM), providing fund managers with significant flexibility for tactical deployment across market segments.

For a comprehensive understanding and deeper insights, please refer to our detailed report available at the link below.

Cash Holding Report – October 2026

Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | AMFI Registered MF Distributor | ARN-0158

Equity Mutual Fund AUM Declines 1.06% in October Amid Mid- and Small-Cap Corrections, While Industry AUM Rises 0.90%: Equity mutual funds’ net AUM declined 1.06% MoM to ₹37.15 lakh crore in October, from ₹37.54 lakh crore in September, a reduction of nearly ₹40,000 crore. In contrast, overall MF industry AUM rose 0.90% to ₹83.39 lakh crore, from ₹82.64 lakh crore. Despite gains in large-cap indices, broader markets corrected, with the Nifty Midcap 150 falling 3.75% and Nifty Smallcap 250 declining 5.81%. The decline in equity AUM reflects valuation pressure in mid- and small-cap stocks, outweighing fresh inflows and highlighting divergent trends in industry and equity fund AUM.

Flexi Cap Funds Retain Top Spot with ₹5.91 Lakh Crore AUM, While Mid and Small Cap Funds Witness Declines. Flexi Cap Funds remained the largest equity mutual fund category, with net AUM increasing to ₹5.91 lakh crore in October, from ₹5.88 lakh crore in September. Mid Cap Funds followed at ₹5.03 lakh crore, declining from ₹5.14 lakh crore, making Flexi Cap and Mid Cap Funds the only two equity categories with AUM above ₹5 lakh crore each. Meanwhile, Small Cap Fund AUM declined to ₹4.41 lakh crore from ₹4.62 lakh crore, reflecting the impact of sharp corrections in broader markets. The divergence highlights relative resilience in diversified equity strategies, while mid- and small-cap categories faced valuation pressure despite continued investor inflows.

Mutual Funds Show Strong Appetite for IPOs, with Jio Platforms, Zetwerk and Bonfiglioli Leading Fresh Additions. Equity mutual funds demonstrated strong participation in new offerings, with 95 schemes adding Jio Platforms and collectively acquiring 0.46% of the company. Other notable IPO additions included Zetwerk Manufacturing Businesses (59 schemes; 8.72% stake acquired), Bonfiglioli Transmissions (46; 9.30%), Tonbo Imaging India (25; 10.81%), HD Fire Protect (19; 5.55%) and Paras Healthcare (18; 7.16%). The relatively higher stakes acquired in Tonbo Imaging, Bonfiglioli Transmissions, Zetwerk and Paras Healthcare indicate significant mutual fund participation in these companies.

Mutual Funds Add Fresh Positions Across Technology, Banking, Capital Markets and Industrials. Beyond new offerings, mutual fund schemes initiated exposure to Persistent Systems, Kotak Mahindra Bank, BSE, Ather Energy, One97 Communications, TD Power Systems, Cemindia Projects, Zydus Lifesciences and PTC Industries. These additions reflect diversified investment interest across IT, banking, capital-market infrastructure, electric vehicles, fintech, pharmaceuticals and industrial manufacturing, highlighting selective accumulation in established businesses alongside emerging growth opportunities.

MF Schemes Record Full Exits Across Fintech, IT, Banking, Metals and Automobiles. On the exit side, 20 schemes fully exited PB Fintech, followed by 16 schemes each exiting Swiggy and Tata Steel, and 15 schemes exiting Infosys. Other notable exits included Muthoot Finance, Hindalco Industries, Bajaj Auto, Tata Consultancy Services, Oracle Financial Services Software and Bharat Forge. Additionally, 11 schemes exited IndusInd Bank, while 10 schemes each exited Maruti Suzuki India, National Aluminium Company, Axis Bank and Dixon Technologies, indicating selective portfolio rebalancing across financial services, technology, metals, automobiles and electronics manufacturing. Overall, these exits suggest sectoral rotation and profit booking as mutual funds reassessed individual stock exposures.

For a comprehensive understanding and deeper insights, please refer to our detailed report available at the link below.

Activities of Equity MFs – October 2026

Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | AMFI Registered MF Distributor | ARN-0158

The mutual fund industry recorded a net inflow of ₹1.74 lakh cr in October, reversing September’s net outflow of ₹1.33 lakh cr, as corporate cash returned to overnight and liquid funds after quarter-end. Average AUM eased 2.2% to ₹85.18 lakh cr, as the month began from September’s lower month-end base. Month-end Net AUM rose 0.9% to ₹83.39 lakh cr. Equity inflows moderated 13.9% to ₹32,994 cr, a 68th consecutive month of inflows, while flows rotated towards large caps. SIP contributions eased 1.0% to ₹32,160 cr, and SIP discontinuations exceeded new registrations during the month.

Inflows moderated as purchases slowed. Equity net inflows fell 13.9% to ₹32,994 cr. Gross purchases fell 12.4% to ₹65,581 cr, while redemptions fell 10.8% to ₹32,588 cr. September’s improvement was driven by lower redemptions; October’s moderation was driven by lower fresh purchases. Equity Average AUM eased 3.2% to ₹37.28 lakh cr.

Flows rotated towards large caps, in line with market performance. Large & Mid Cap fund inflows nearly doubled to a record ₹8,484 cr, above the previous high of ₹5,307 cr in March 2026. Large Cap fund inflows rose 20% to ₹1,032 cr, the highest since June. The combined share of Small Cap and Mid Cap funds in equity flows fell to 34% from 44%, confirming the rebalancing towards large caps noted last month. 

Short-end flows returned after quarter-end, but only in part. Debt schemes recorded a net inflow of ₹1.13 lakh cr, against an outflow of ₹1.83 lakh cr in September. Overnight funds recorded a net inflow of ₹54,893 cr, the highest monthly inflow since at least 2021, and Liquid funds recorded a net inflow of ₹70,534 cr. The recovery was weaker than in October 2025, when debt funds recorded a net inflow of ₹1.60 lakh cr, likely reflecting tighter banking-system liquidity.

Hybrid returned to inflow on arbitrage flows. Hybrid schemes recorded a net inflow of ₹3,514 cr, against an outflow of ₹457 cr in September, as arbitrage funds recorded a net inflow of ₹3,929 cr after September’s quarter-end outflow of ₹3,956 cr. Excluding arbitrage, hybrid flows turned to an outflow of ₹415 cr, against an inflow of ₹3,499 cr in September. Hybrid Average AUM eased 1.7% to ₹12.34 lakh cr.

For a comprehensive understanding and deeper insights, please refer to our detailed report available at the link below.

Mutual Fund Flows – October 2026

Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | SEBI Registered MF Distributor | ARN-0158

October’s losses spread to every category beyond the shortest end of the curve. Every category from short duration outwards posted negative one-month returns, and the losses in Long duration, Gilt, Medium-to-Long and Dynamic bond funds were much larger than in September. This time the pressure also reached Money Market, Ultra-Short and Low-duration funds, which earned well below Overnight and Liquid funds as certificate of deposit and commercial paper yields rose sharply. Only Overnight, Liquid and Arbitrage funds delivered returns close to their usual levels.

Overall, October showed how quickly the debt market reprices when liquidity, not just the policy rate, is tightened, and the early-November fall in yields showed how quickly sentiment can turn when crude falls. The October CPI print on 12 November and the MPC decision on 4 December are likely to decide whether the fall in yields can hold against domestic tightening, with US–Iran talks and crude the main global risks. Until these clear, accrual remains the anchor of debt portfolios, with arbitrage funds for tax-efficient parking.

Short-term rates rose across the board. The call rate, which traded below the SDF rate in early September, moved above the repo rate by mid-October, moving from below the SDF rate to above the repo rate in about six weeks. CD rates rose the most: banks returned to the CD market for funding once the surplus disappeared and the daily CRR requirement was tightened, and three-month CD rates rose 126 bps. CP rates rose almost as much, while three- and six-month T-bill yields rose 41–59 bps as markets priced in further rate hikes. The RBI also rejected all bids at the T-bill auction on 21 October, signalling discomfort with higher short-term yields.

Corporate bond yields rose with gilts in October, but spreads moved in opposite directions by maturity. The three-year AAA spread narrowed from about 148 bps to 139 bps. Short-dated gilt yields rose the most from tighter liquidity and the RBI’s ₹25,000 crore OMO sale, conducted on 13 October, which sold bonds maturing in 2030–33. The five-year spread widened from about 125 bps to 133 bps as corporate yields rose faster than gilts. AA and A-rated bonds followed the same pattern. Three- and five-year AAA paper now yields well above 8%, while fresh issuance stayed low. This differs from September, when spreads narrowed at both maturities.

For a comprehensive understanding and deeper insights, please refer to our detailed report available at the link below.

Monthly Debt Market Snapshot – October 2026

Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | SEBI Registered MF Distributor | ARN-0158

FPIs Turn Net Buyers in the Second Half of October, Signalling Improving Sentiment: FPIs recorded net equity inflows of ₹13,112 Cr during October 16–31, marking a positive reversal from heavy selling of ₹47,955 Cr in the first half. This recovery helped moderate overall October net equity outflows to ₹34,843 Cr, compared with ₹35,861 Cr in September. Although October marked the second consecutive month of net selling and the seventh selling month in CY2026, against three months of net buying — February, July and August, the return of foreign buying in the second half indicates improving investor sentiment and early signs of renewed foreign interest in Indian equities.

Secondary Market Selling Remains Heavy, While Primary Market Attracts Foreign Capital: October’s equity outflows were driven by substantial selling in the secondary market, where FPIs withdrew ₹48,082 Cr. In contrast, FPIs remained net buyers of ₹13,239 Cr in the primary market, reflecting continued participation in IPOs and new issuances. Strong primary market inflows partially offset secondary market withdrawals, indicating that foreign investors remained selective in their equity allocations rather than withdrawing uniformly across the market.

FPI Debt Flows Turn Positive After Two Consecutive Months of Selling: FPIs recorded net debt inflows of ₹691 Cr in October, reversing the selling trend observed in August and September, when outflows stood at ₹1,457 Cr and ₹20,727 Cr, respectively. Debt investments were positive at ₹2,067 Cr during October 1–15, before witnessing outflows of ₹1,376 Cr in the second half. Segment-wise, the Debt-General Limit attracted ₹7,336 Cr, while Debt-VRR recorded inflows of ₹341 Cr. However, Debt-FAR witnessed significant selling of ₹6,986 Cr, largely offsetting the inflows in other debt segments.

IT Emerges as the Largest FPI Buying Sector: The IT sector attracted the highest FPI inflows of ₹13,514 Cr in October, with buying accelerating sharply from ₹2,599 Cr in the first half to ₹10,915 Cr in the second half. Telecommunication emerged as the second-largest buying sector at ₹7,137 Cr, reversing first-half selling of ₹3,928 Cr with substantial second-half purchases of ₹11,065 Cr. The strong inflows into IT and Telecom highlight a selective shift in foreign investor preference towards technology and communication sectors.

FMCG and Financial Services Face the Heaviest FPI Selling: FMCG emerged as the largest FPI selling sector in October, recording outflows of ₹9,731 Cr, compared with ₹3,001 Cr in September. Financial Services followed closely with selling of ₹9,517 Cr, extending September’s substantial outflows of ₹13,147 Cr. Selling was concentrated in the first half, with FMCG witnessing withdrawals of ₹8,172 Cr and Financial Services ₹8,634 Cr, reflecting continued foreign investor caution towards consumption-related and financial stocks.

For a comprehensive understanding and deeper insights, please refer to our detailed report available at the link below.

October Market Pulse Report