Portfolios

August Snapshot: FPIs Extend Equity Selloff, DIIs and MFs Lead with Strongest Monthly Inflows of 2025

August’s Sectoral Moves: FPIs Cut Financials & Information Technology

• Financials & IT Lead the Sell-Off: FPIs pared down positions heavily in Financial Services (₹23,288 Cr) and Information Technology (₹11,285 Cr), the hardest-hit sectors in August. Financials saw outflows of ₹13,471 Cr in the first half and ₹9,817 Cr in the second, while IT recorded ₹6,380 Cr selling early in the month and ₹4,905 Cr in the latter half.
• Oil, Power & Consumer Plays Under Fire: Selling pressure also extended to Oil & Gas (₹6,108 Cr) and Power (₹4,066 Cr), while Consumer Durables (₹1,969 Cr), Healthcare (₹1,417 Cr), Realty (₹1,245 Cr) and FMCG (₹1,097 Cr) witnessed moderate but steady exits.

Selectively Buy Domestic Plays: Telecom & Autos Attract Inflows

• Telecom & Autos Emerge as FPI Favorites: FPIs placed big bets on Telecommunication, emerging as the top buy with ₹5,766 Cr of net inflows. Interestingly, flows were sharply front-loaded, with a massive ₹7,446 Cr infusion in the first half, partly offset by profit booking of ₹1,680 Cr in the second. The Automobile sector also saw renewed interest, ending August with ₹1,803 Cr of net buying—despite a weak start marked by ₹814 Cr of outflows in the first half, FPIs turned strong buyers with ₹2,617 Cr in the latter half, underscoring confidence in India’s domestic demand story.
• Broader Domestic Bets Gain Traction: FPIs also bought into Construction Materials (₹2,475 Cr), Services (₹2,351 Cr) and Capital Goods (₹1,896 Cr), showing selective optimism, while Chemicals (₹1,571 Cr), Construction (₹1,356 Cr) and Media & Entertainment (₹165 Cr) added to diversified domestic bets.

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

August Fortnight Review: DIIs and MFs Lead Record Buying Against FPI Exit Pressure

FPI Selling Intensifies in Financials & Technology – FPIs executed sharp exits from large-weight sectors, led by Financial Services (₹13,471 Cr) and Information Technology (₹6,380 Cr), reflecting global risk-off sentiment. Heavy selling also hit Oil & Gas (₹4,091 Cr) and Power (₹2,358 Cr), while moderate withdrawals were seen across Healthcare (₹2,095 Cr), Realty (₹1,211 Cr), FMCG (₹1,150 Cr) and Consumer Durables (₹1,133 Cr). The selling pattern underscores a move away from defensives and heavyweights, balancing selective accumulation in infrastructure-oriented themes.

FPI Buying Concentrated in Telecom & Infrastructure Plays – In the first half of August 2025, FPIs showed strong buying interest in select sectors, led by Telecommunication with ₹7,446 Cr inflows, making it the standout gainer. Infrastructure-linked sectors also attracted healthy investments with Construction Materials (₹1,690 Cr), Construction (₹1,378 Cr) and Capital Goods (₹1,132 Cr) drawing attention. Modest inflows were also seen in Metals & Mining (₹606 Cr), Chemicals (₹410 Cr) and Services (₹384 Cr), signaling FPI preference for growth-driven and cyclical opportunities.

FPI Equity Selling Surges Beyond July Levels – Foreign Portfolio Investors (FPIs) stepped up their equity sell-off in the first half of August 2025, recording a net outflow of ₹20,975 Cr—sharply higher than the ₹17,741 Cr withdrawn in July. This includes a secondary market sell-off of ₹23,554 Cr, partially offset by ₹2,579 Cr of investment in primary markets, reflecting selective interest in new listings. With this, net FPI equity outflows for calendar year 2025 have soared to ₹1.16 Lakh Cr, highlighting their sustained bearish stance on Indian equities so far this year.

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

Equity MFs AUM Slips Despite Record MF Peak: The Mutual Fund industry’s net AUM climbed to a record ₹75.37 Lakh Cr in July, yet equity MFs net AUM eased 0.57% to ₹33.28 Lakh Cr from its fresh peak of ₹33.47 Lakh Cr in June. This setback came despite record inflows and all-time-high SIP contributions, as market corrections weighed on valuations.

Mutual Funds Rush to IPOs in July: Mutual funds showed strong primary-market appetite, investing in several high-profile IPOs. Major allocations went to Anthem Biosciences (67 schemes; 5.98%), HDB Financial Services (44; 3.89%), Aditya Infotech (23; 2.53%), Travel Food Services (21; 4.07%), NSDL (20; 2.48%), Indiqube Spaces (18; 5.67%), and M&B Engineering (14; 7.85%).

Mutual Funds Expand Portfolios with New Stock Additions: Stocks like State Bank of India, Swiggy, Gabriel India, Navin Fluorine, Glenmark Pharma, Mahindra & Mahindra, RBL Bank and Eternal were actively added as fresh investments by several equity mutual fund schemes in July, reflecting a growing appetite across banking & financials, consumer services, chemicals, healthcare and auto-related sectors.

Funds Restructure Portfolios with Targeted Exits: Many equity mutual fund schemes fully exited stocks like IEX, Indian Hotels, Axis Bank, United Spirits, Mankind Pharma, Info Edge, SBI Cards, Siemens Energy India, HAL, Reliance Industries, BSE, InterGlobe Aviation, Max Financial and Cipla, reflecting profit booking and portfolio reshuffling amid shifting market dynamics.

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

Cash Holdings Rise Despite Aggressive Buying: Equity mutual funds increased cash reserves to ₹2.07 lakh crore in July 2025, up from ₹2.04 lakh crore in June, even as they bought equities worth ₹47,019 crore in July. The rise was aided by record inflows and a drop in equity valuations during the market correction.

AMC Cash Ratios Breach 5% Mark: The average cash holding ratio among the top 20 AMCs climbed to 5.94% in July from 4.88% in June, decisively crossing the 5% level. This reflects a cautious stance, with fund managers prioritising liquidity over full equity deployment amid uncertain market conditions.

Cash-Heavy Mutual Funds: PPFAS Tops with 21.36%, SBI Holds ₹34,592 Cr –SBI Mutual Fund holds the largest cash pile at ₹34,592 crore (4.75% of AUM), followed by ICICI Prudential MF with ₹27,999 crore (5.98%). HDFC MF ranks close with ₹27,031 crore (6.43%), reflecting substantial liquidity positions among the biggest fund houses. PPFAS MF stands out with the highest cash-to-AUM ratio at 21.36% (₹25,375 crore), followed by Quant MF at 9.12% (₹7,978 crore) and Motilal Oswal MF at 8.61% (₹9,031 crore), signalling a notably cautious approach.

Parag Parikh & SBI Contra Lead in Cash Proportion: Parag Parikh Flexi Cap Fund tops with 21.66% of AUM in cash (₹24,532 crore), followed by SBI Contra Fund at 19.86% (₹9,325 crore) and Motilal Oswal Midcap Fund at 17.96% — signalling a strong liquidity stance to deploy capital when opportunities arise.

Contra & Flexi Cap Funds Lead the Cash Pile: Contra Funds hold the largest liquidity cushion in terms of percentage with 15.14% of AUM in cash (₹10,706 crore), followed by Flexi Cap Funds at 9.67% (₹47,698 crore). This indicates a defensive stance, keeping ample cash to capitalise on market corrections.

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

The mutual fund industry’s average AUM hit a record ₹77 lakh crore in July, up 2.96% from June, driven by ₹1.79 lakh crore in net inflows and equity market gains.

Equity inflows surged 81% MoM to an all-time high of ₹42,708 crore, marking the 53rd straight month of gains. Sectoral/Thematic Funds led with ₹9,426 crore, boosted by seven new scheme launches.

Hybrid funds saw ₹20,879 crore in inflows, with Multi Asset Allocation Funds hitting an 18-month high of ₹6,197 crore and Arbitrage Funds attracting ₹7,295 crore amid volatile markets.

FoF (Domestic) inflows eased to ₹7,034 crore, while Other ETFs drew ₹4,477 crore.

Debt AUM rose 5.12% to ₹19.53 lakh crore, led by ₹44,573 crore in Money Market Fund inflows.

SIP inflows touched a record ₹28,464 crore, reflecting steady retail participation and long-term commitment.

For more details read through our comprehensive Mutual Fund Flow Report for July, 2025.

July Snapshot: FPIs Dump Equities Aggressively in Second Half; DIIs and MFs Provide Strong Support

July’s Sectoral Sell-Off: FPIs Slash Positions in IT & Financials

• Tech & Financials Bear the Brunt: FPIs executed an aggressive sell-off in Information Technology, dumping ₹19,901 Cr—with a sharp ₹14,422 Cr outflow in the second half alone. Financial Services also witnessed heavy selling, with ₹5,900 Cr of net outflows, reflecting risk aversion amid global headwinds and profit booking.
• Cyclical Sectors Under Pressure: Selling extended to Realty (₹3,933 Cr), Automobile & Auto Components (₹3,584 Cr), Oil & Gas (₹3,272 Cr), and Consumer Durables (₹2,614 Cr). Even Construction and Media saw steady exits, indicating a broad-based pullback from cyclical and rate-sensitive sectors in the face of macro uncertainties.

FPIs Bet on Domestic Demand and Defensive Plays in July

• Services, Consumption & Mining Lead Buys: Despite net equity outflows in July, FPIs selectively bought into domestic-facing sectors. Services (₹3,457 Cr), Metals & Mining (₹3,365 Cr) and Consumer Services (₹3,017 Cr) topped the buy list, reflecting a tilt toward consumption-led growth and earnings visibility. FMCG staged a sharp rebound, reversing a ₹1,428 Cr sell-off in the first half with a ₹2,986 Cr buy-in later, ending the month with ₹1,558 Cr inflows.
• Broader Defensive Buying Continues, But Capital Goods Wobbles: FPIs also favored Telecom (₹1,473 Cr), Chemicals (₹1,129 Cr) and Construction Materials (₹329 Cr). However, Capital Goods witnessed a shift in sentiment—turning from ₹922 Cr buying in the first half to ₹617 Cr selling in the second, ending with a tepid ₹305 Cr net inflow.

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

July witnessed consolidation in the debt market following June’s repricing, with yields largely range-bound across the curve. Crude oil prices remained volatile but ended higher on supply concerns and geopolitical developments. Liquidity in the banking system stayed in surplus, though the RBI actively managed it through frequent VRRR operations. Meanwhile, the rupee weakened sharply amid renewed trade tensions and heavy FPI outflows, underperforming most regional peers despite a mid-month softening in the dollar index.

Money Market and Low Duration Funds continued to lead the sub-1-year space in July, delivering healthy 3-month annualised returns of 7.36%, supported by elevated short-term rates and stable accrual. Corporate Bond and Credit Risk Funds stood out in the short- to medium-term horizon, benefiting from spread compression and strong demand for high-quality credit.

The Indian rupee depreciated sharply, ending July near record lows due to renewed trade tensions, persistent FPI outflows, and a strengthening dollar. Despite RBI intervention, the rupee underperformed regional peers and remains on a cautious footing.

The attached snapshot captures all these key developments, along with category-wise mutual fund performance trends.

Click below to read the full snapshot attached.

July Fortnight Review: FPIs Slash Equities, Ramp Up Debt; DIIs & MFs Turn Cautious

FPI Selloff Hits IT and FMCG: Defensive Sectors See Heavy Profit Booking – The Information Technology sector bore the brunt of FPI selling in early July, with massive outflows of ₹5,479 Cr, indicating a continuation of profit-booking seen over recent months. FMCG(₹1,428 Cr) and Consumer Durables(₹1,292 Cr) were the next in line, suggesting that FPIs are turning cautious on defensives amid stretched valuations. Other sectors witnessing notable exits include Automobiles(₹1,159 Cr), Healthcare(₹757 Cr), Realty, Media and Construction.

FPI Sectoral Buys: Services, Metals and Consumer Plays Shine in July – During the first half of July 2025, FPIs showed selective buying interest, primarily in domestic-facing and infrastructure-related sectors. Leading the charge was the Services sector with ₹2,733 Cr of inflows, followed by Metals & Mining at ₹1,724 Cr. Consumer Services (₹953 Cr), Capital Goods (₹922 Cr), Oil & Gas (₹900 Cr) and Financial Services (₹820 Cr) drew notable FPI interest, along with modest picks in Telecommunication and Textiles.

FPI Investment Scorecard 2025: Telecom and Financials Lead the Buying Spree – For year-to-date, FPIs favoured Telecommunication (₹26,968 Cr), Financial Services (₹14,537 Cr) and Services (₹10,027 Cr), with steady flows into Chemicals, Media, Textiles and Oil & Gas—highlighting a tilt towards structural growth and domestic demand themes.

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

Mutual Funds Stay Selective Despite Market Optimism: India’s equity mutual funds embraced a more confident tone in June 2025, stepping up their market purchases amid a surge in investor appetite. Backed by robust equity inflows and record-breaking SIP contributions, the industry’s cash holdings stood at ₹2.04 Lakh Cr—only marginally lower than May’s ₹2.17 Lakh Cr. This modest dip signals that while fund managers are gradually deploying capital, they continue to tread with caution, maintaining healthy liquidity buffers for strategic opportunities ahead.

Cash Holding Ratio Slips Below 5% as Equity Allocation Rises: The average cash holding ratio among the top 20 AMCs declined to 4.88% in June 2025, slipping well below the 5% mark and down from 5.75% in May. This steady drop reflects a measured increase in equity allocations, signaling growing conviction among fund managers while still maintaining prudent liquidity levels.

Cash-Heavy Mutual Funds: PPFAS Tops with 19.65%, SBI Holds ₹34,655 Cr – SBI MF holds the largest pile at ₹34,655 Cr, followed by ICICI Pru MF ₹28,196 Cr and HDFC MF MF ₹27,013 Cr, showing significant dry powder among large AMCs. PPFAS MF leads the pack with the highest cash holding ratio at 19.65%, reflecting its conservative and flexible investment approach. Motilal Oswal MF and Quant MF follow with 8.64% and 7.25% of AUM in cash, respectively, highlighting strong liquidity positioning.

Parag Parikh Flexi Cap Fund holds the highest cash ratio among equity schemes at 19.89%, reflecting a strong liquidity stance amid prevailing market uncertainties. Close behind, SBI Contra Fund and SBI Small Cap Fund maintain elevated cash levels of 19.29% and 17.44%, respectively, positioning themselves among the most liquidity-heavy active equity strategies. Motilal Oswal Midcap Fund also stands out with a notable 16.63% in cash, while HDFC Focused Fund holds 16.07%, both indicating a cautious and flexible approach in response to potential market volatility.

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

Equity MF AUM Hits Fresh Peak on Market Euphoria & Record SIPs: Equity mutual funds extended their stellar run in June with a sharp 4.41% rise in Net AUM to a record ₹33.47 Lakh Cr, driven by strong market performance and record SIP inflows, reflecting rising investor confidence and a bullish retail sentiment.

IPO Debuts Shine Bright on MF Radar in June: Equity Mutual Funds showed strong enthusiasm for newly listed IPOs — HDB Financial Services led with 50 schemes adding it, while Ellenbarrie Industrial Gases and Oswal Pumps also garnered notable traction.

Fresh Bets: MFs Diversify Across Key Growth Sectors: Stocks like Vishal Mega Mart, Biocon, Interglobe Aviation, Swiggy, Aptus Value Housing, ZF Commercial Vehicle, Kaynes Technology, Tech Mahindra, One97 Communications, Aditya Birla Capital, Blue Star and Torrent Pharma were actively added as fresh investments by several equity mutual fund schemes, reflecting growing appetite across consumer, healthcare, financials, tech and auto-related sectors.

MFs Book Profits, Exit Key Names Amid Market Rotation: Many equity mutual fund schemes exited stocks like TCS, BSE, ICICI Bank, Cholamandalam Finance, United Spirits, Indian Bank, ITC, Dixon Technologies, Tata Motors, Eternal, Federal Bank, Bajaj Finance, Mazagon Dock, Page Industries and Ipca Labs, indicating profit booking and portfolio reshuffling amid shifting market dynamics.

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