Mutual Funds

Historic FPI Equity Sell-Off at ₹142,616 Cr; Shift to Debt at ₹34,791 Cr
FPIs offloaded a historic ₹142,616 Cr from equities in just 2.5 months, including ₹30,015 Cr in March’s first half alone, while shifting focus to debt with ₹34,791 Cr investment. Counteracting this, DIIs infused ₹177,895 Cr , supported strongly by Mutual Funds’ bullish bets (₹122,373 Cr YTD) , stabilizing markets amid intense volatility.

FPIs Dump IT, FMCG & Financials; Bet on Telecom & Metals
FPIs initiated heavy sell-offs in IT (₹6,934 Cr), FMCG (₹5,106 Cr), Auto and Financial Services in early March. For CY25, the Financial Services sector faced the largest selling (₹35,251 Cr). Conversely, FPIs showed optimism in Telecom, Metals, Chemicals, Textiles and Media , marking a strategic shift amid volatility.

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

Market Corrections Shake Equity MFs: Fresh Picks & Strategic Selloffs

Equity Mutual Funds Face Early 2025 Jitters: Equity mutual funds stumbled at the beginning of 2025, witnessing a 10.39% drop in Net AUM to ₹27.40 Lakh Cr in just two months. The downturn was triggered by a sharp correction in Mid Cap and Small Cap stocks, shaking investor confidence.

Equity MFs Go Bold: Hexaware IPO Bet & High-Conviction Picks: Doubling down on fresh opportunities, 42 equity mutual fund schemes grabbed a 6.3% stake in the Hexaware Technologies IPO, signaling strong confidence in new-age investments. MFs are ramping up positions in high-potential stocks, favoring Kotak Mahindra Bank, SBI Cards & Payment Services, Eicher Motors, UPL, Marico, HDFC AMC, Avenue Supermarts, Maruti Suzuki, M&M and IndusInd Bank. Adding to their aggressive stance, they also backed the IPOs of Ajax Engineering and Quality Power Electrical Equipments.

Equity Schemes Exit Key Positions in Major Companies: Equity mutual funds are reworking their portfolios, fully exiting key positions in NTPC Green Energy, Swiggy, Siemens, REC, Trent, Bharat Electronics, HPCL, Voltas, Bharti Hexacom, Titan, HCL Tech, Grasim and Hindustan Unilever. This signals a strategic shift as funds reposition themselves for new opportunities.

Equity Mutual Funds Accumulate in Market Leaders, Trim Positions in Infosys & SBI: Equity mutual funds actively accumulated top-tier stocks, betting big on Coforge, Max Healthcare Institute, Power Grid, Ultratech Cement, Zomato, HDFC Bank, L&T, Kotak Mahindra Bank, M&M, Axis Bank, Maruti Suzuki, TCS and Reliance, showcasing strong confidence in these market giants. Meanwhile, Infosys, InterGlobe Aviation, SBI, ICICI Bank, Bajaj Finance and Trent saw notable selloffs, indicating a strategic shift in fund allocations.

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

The Mutual Fund industry’s average AUM dipped by 0.68% to ₹67.58 Lakh Cr in February.

Equity-oriented schemes extended their positive streak, though net inflows dropped 26%.

Sectoral/Thematic funds continued to dominate inflows, attracting the highest investments.

SIP inflows dipped 1.52% to ₹25,999 Cr.

Index Funds and Other ETFs maintained steady inflows, reflecting investors’ preference for passive strategies.

The average AUM of debt funds rose 3.21% in February, despite an outflow of ₹6.56K Cr.

Liquid funds recorded the highest inflows of ₹4.98K Cr.

For an in-depth exploration, read through our comprehensive Mutual Fund Flow Report for February, 2024.

Financial Services: The Biggest Casualty – FPIs aggressively sold ₹6,991 Cr in February, making it the most offloaded sector. The YTD outflows surged to ₹31,940 Cr, reflecting deep concerns over banking and financial stability.

FPI Sell-Off Hits FMCG, Auto, Capital Goods, Construction & Power – Foreign investors continued their selling spree across major sectors. FMCG faced ₹6,904 Cr outflows in February, totaling ₹12,332 Cr YTD, while Capital Goods lost ₹4,464 Cr, with YTD exits at ₹10,161 Cr.

FPIs Bet Big on Telecom & Chemicals – Foreign investors remained bullish on Telecommunication, investing ₹7,998 Cr in February, bringing YTD inflows to ₹8,142 Cr, making it the top sector of choice. Chemicals also attracted steady interest, with ₹429 Cr inflows in February, pushing total YTD investments to ₹784 Cr.

2025 Off to a Rough Start – With February’s outflows, FPIs have now pulled out a staggering ₹1,12,601 Cr from Indian equities in the 2025 calendar year, underscoring their cautious stance amid global uncertainties.

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

Record FPI Sell-Off: Worst Start in a Decade – Foreign Portfolio Investors (FPIs) have offloaded a staggering $11 billion (₹99,299 Cr) worth of Indian equities in just six weeks of 2025, marking the highest-ever outflow for this period. This relentless selling spree has triggered the worst start for domestic markets in nearly a decade, intensifying volatility and investor caution.

DII Power Play: The Market’s Backbone – DIIs infused ₹26,019 Cr into equities in the first half of February, cushioning the impact of FPI selling. Their confidence in the market is reflected in their massive ₹112,611 Cr investment from January 1 to February 15.

FPI Sell-Off: Financials Services Sector Hit Hard in 2025 – Financial Services took the biggest hit, with FPIs offloading a massive ₹30,293 Cr, signaling heightened risk aversion. Consumer Services (₹10,609 Cr), FMCG (₹9,764 Cr) and Capital Goods (₹8,903 Cr) also faced heavy selling, reflecting caution in discretionary spending.

Selective Buying: Focus on Telecom, Healthcare and Chemicals – Amid a significant sell-off in the first half of February, FPIs flocked to Telecommunication, leading with ₹2,337 Cr inflows, while Healthcare attracted ₹1,534 Cr as a defensive bet. Information Technology, Chemicals, Services and Textiles also gained traction.

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

January 2025 Equity MFs Insights: Market Jitters, SIP Resilience & Inflow Trends

January Kickoff: Equity Mutual Funds Face a Dip – Equity mutual funds took a hit at the start of 2025, with Net Assets Under Management (AUM) slipping 3.62% to ₹29.47 Lakh Cr. The decline was fueled by a correction in Mid Cap and Small Cap stocks, dampening investor sentiment.

Mutual Funds Double Down on High-Conviction Stocks – Equity mutual fund schemes are doubling down on fresh investments in high-potential stocks, showing a strong preference for companies like Adani Wilmar, Bajaj Finance, BSE, Maruti Suzuki, Trent, Apollo Hospitals, Grasim Industries, Kotak Mahindra Bank, M&M, Navin Fluorine, SRF, Cholamandalam Investment & Finance and Indus Towers. Adding to their aggressive stance, 23 equity mutual funds have also participated in the Laxmi Dental IPO, signaling confidence in new opportunities.

Equity Schemes Exit Key Positions in Major Companies – Several equity schemes have completely offloaded their holdings in companies like Waaree Energies, HCL Technologies, Kalyan Jewellers, Jindal Steel & Power, Dabur India, CDSL, Sona BLW Precision Forgings, Hyundai Motor India, Bajaj Housing Finance, Voltas, Motilal Oswal Financial Services, Hindalco Industries and Netweb Technologies India, signaling a shift in investment strategy.

Mutual Funds Boost Mid-Cap Bets, Trim Coforge & Indian Hotels – Among the top-traded mid-cap stocks, equity mutual fund schemes actively invested in Adani Wilmar, Dixon Technologies, Persistent Systems, Indraprastha Gas, IndusInd Bank, Max Healthcare, ICICI Lombard and Bharat Forge, signaling confidence in these stocks. On the flip side, some schemes opted to pare down holdings in Coforge and The Indian Hotels, indicating a strategic portfolio reshuffle.

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

The Mutual Fund industry’s average AUM dipped to ₹68.04 Lakh Cr in January, a 1.85% decline from previous month’s average AUM despite hefty net inflows of ₹1.87 Lakh Cr.

Equity-oriented schemes continued their positive streak, recording net inflows of ₹39.69K Cr.

ELSS, Focused and Large Cap Funds experienced remarkable surges in inflows, skyrocketing by 324%, 72% and 52% respectively.

SIP inflows saw a slight dip of 0.2%, declining to ₹26,400 Cr from ₹26,459 Cr.

Inflows in Index Funds and Other ETFs surged indicating a strong investor preference for passive investment strategies.

The average AUM of debt funds grew by 0.99% in January, driven by an inflow of ₹1.28 Lakh Cr, reversing from ₹1.27 Lakh Cr outflows in December.

For an in-depth exploration, read through our comprehensive Mutual Fund Flow Report for January, 2024.

January’s Aggressive FPI Selloff in Key Sectors – FPIs offloaded heavily in Financial Services (₹24,949 crore), with notable outflows in Consumer Services and Information Technology, amid global slowdown fears. Auto & Auto Components, Capital Goods , Healthcare, FMCG and Power also faced significant sell-offs due to cautious sentiment and valuation concerns.

Selective FPI Bets Amid Bearish Trend – Despite a broad selloff, FPIs showed interest in select sectors with Textiles leading at ₹602 crore, followed by Chemicals, Diversified, Media & Entertainment and Telecommunication, reflecting confidence in export-driven growth, specialty chemicals, and digital infrastructure.

FPIs Selloff: Global Sentiment Turns Cautious– FPIs withdrew ₹78,027 crore from Indian equities in January, signaling risk-off sentiment due to global uncertainties. Notably, there was net buying on just one trading day out of the 23 sessions in January, highlighting persistent selling pressure. In contrast to the secondary market sell-off, FPIs showed interest in the primary markets with purchases worth ₹3,877 crore. A modest inflow of ₹571 crore was recorded in the debt segment, reflecting selective interest in fixed-income securities.

DII Power Play: Strong Support Amid Market Volatility – DIIs infused ₹86,592 crore into equities in January, providing strong support amid foreign outflows. Their consistent buying reflects robust confidence in India’s economic fundamentals and growth prospects.

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

FIIs pulled out ₹44,396 crore from equity market in January 2025 due to: Strong US Dollar (Dollar Index > 109), Higher US bond yields (10-year yield > 4.6%) and Expectations of weak Indian corporate earnings

The Indian Rupee weakened, breaching ₹86 per dollar, marking a historic low.

Since Donald Trump’s re-election in November 2024, the Dollar Index has steadily strengthened, impacting emerging market currencies.

The Dollar’s rise highlights global confidence in the US economy amid limited Federal Reserve rate cuts and robust performance.

India’s forex reserves fell for six consecutive weeks, reaching $625.9 billion (10-month low as of January 10, 2025) primarily due to the Reserve Bank of India’s efforts to stabilise the rupee through dollar sales.

Banking system liquidity has remained in deficit since mid-December mainly driven by the Reserve Bank of India’s (RBI) interventions to stabilize the rupee, which have further widened the liquidity deficit.

To address the liquidity deficit, the RBI has implemented several measures, particularly during periods of heightened stress or currency market volatility. These include:

VRR Auctions: Regular Variable Rate Repo (VRR) auctions to inject liquidity and manage short-term imbalances.

50 bps CRR Cut: A 50 basis points reduction in the Cash Reserve Ratio (CRR) to 4% during the December policy meeting to inject additional liquidity into the banking system.

Open Market Operations (OMO): Purchase of government securities to inject liquidity and stabilize money markets.

Daily VRR Auctions: The RBI’s recent decision to conduct daily VRR auctions ensures tighter control over short-term rates and reaffirms its commitment to aligning overnight rates with the repo rate.

For the full report and detailed insights, click on the link below:

FPI Exodus Hits Financial Services Hard: ₹12,204 Crore Sell-Off – In the first half of January, FPIs intensified their sell-off in the Financial Services sector, accounting for nearly one-third of their total outflows, with ₹12,204 crore offloaded. Other sectors facing significant sell-offs included Consumer Services, Power, Capital Goods, Metals & Mining, Information Technology, Automobile & Auto Components and Construction.

Selective Buying: Focus on Textiles, Media, Chemicals – Amid a significant sell-off in the first half of January, FPIs made modest investments in select sectors, including Textiles, Media and Chemicals.

The US Factor: High Yields and a Strong Dollar– The driving force behind this exodus remains the attractive US bond yields, which have crossed 4.55%, offering safer and higher returns compared to emerging markets. Coupled with a robust dollar index staying above 108, the preference for US assets has further intensified the sell-off.

DIIs Keep Markets Afloat: ₹43,866 Crore Buying in January’s First Half – DIIs purchased stocks worth ₹43,866 crore during this period, bringing their total investments for the financial year to an impressive ₹4,61,976 crore, offering much-needed support to the markets. Domestic Institutional Investors (DIIs) sustained their buying streak in the first half of January, counterbalancing the heavy sell-off by FPIs.

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