Knowledge Base

Year-end setup: Nifty is nearly flat in December (-0.11% MTD as on 22 Dec) but still strong at +10.69% YTD, keeping sentiment constructive.

Seasonality edge: Historically, the Santa window has been favourable for India—Nifty positive 22 out of 25 times since 2000.

2025 key risk: Tariff and trade headlines (including India-linked risks up to 50% in select categories) can quickly disrupt global cues.

Santa Rally drivers: Santa Rally tends to be driven by year-end rebalancing, positioning and thin holiday liquidity, which can amplify moves.

Supportive Cues, Headline Volatility: Global cues remain supportive on expectations of more Fed rate cuts in 2026, but geopolitics and trade/tariff headlines can quickly spark sudden volatility.

What will drive moves: With thin holiday liquidity, the rally—if it plays out—will likely be led by FII flows, rupee movement and positioning.

Bottom line: Santa Rally is more likely than not, but it may be tactical, not euphoric, and highly headline-sensitive.

For more details read through our comprehensive report.

December Fortnight Review: DIIs Hold Firm, MFs Stay Active as FPIs Sell Equities & Debtin

Selective FPI Buying Led by Oil & Gas – FPIs remained highly selective buyers in the first half of December, with Oil & Gas (₹3,001 Cr) dominating inflows on a relative preference for energy-linked plays. Incremental buying was also seen in Metals & Mining (₹807 Cr) and Automobile & Auto Components (₹611 Cr), while Consumer Durables (₹401 Cr) attracted modest interest.

FPI Selling Concentrated in Financials, IT and Services – On the sell side, FPIs saw the sharpest outflows from Financial Services (₹6,516 Cr), indicating meaningful risk reduction in market-heavy sectors. Selling also intensified in Information Technology (₹3,331 Cr) and Services (₹3,237 Cr), alongside continued trimming in Healthcare (₹2,351 Cr) and Power (₹2,118 Cr). Additional pressure was visible in FMCG (₹1,419 Cr), Capital Goods (₹1,218 Cr) and Construction Materials (₹1,125 Cr).

FPIs Accelerate Selling in the First Half of December: Foreign Portfolio Investors (FPIs) remained net sellers in Indian equities during 1st–15th Dec 2025, with total equity outflows of ₹17,821 Cr. The selling was driven by a secondary market selloff of ₹19,876 Cr, which was partially offset by primary market buying (IPO) of ₹2,055 Cr.

Debt Flows Turn Negative: Unlike the preference for debt seen in parts of earlier months, FPIs also recorded net debt outflows of ₹7,768 Cr in the first half of December, indicating a more cautious stance across risk assets and fixed income during this fortnight.

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

Equity MFs Scale New AUM Peak in November: Equity mutual funds touched a record high in November, with Net AUM rising 1.40% month-on-month to ₹35.66 lakh Crore, compared with ₹35.17 lakh crore in October. The broader mutual fund industry also crossed a major milestone, as overall Net AUM increased 1.16% to ₹80.80 lakh crore. This steady expansion was supported by near-record SIP inflows alongside moderate equity market gains, highlighting continued investor confidence and resilience in long-term equity participation despite prevailing market uncertainties.

Mutual Funds Signal Strong Interest in November IPOs: Equity mutual funds showed healthy appetite for November’s IPO/primary-market additions, selectively building exposure to newly listed names. Key IPO entries included Billionbrains Garage Ventures(Groww) (52 schemes; 3.70%), Tenneco Clean Air India (42 schemes; 6.16%), Physicswallah (35 schemes; 3.96%), Pine Labs (33 schemes; 7.80%), Emmvee Photovoltaic Power (24 schemes; 5.04%), Capillary Technologies India(19 schemes; 11.37%) and Sudeep Pharma (16 schemes; 3.14%), reflecting broad-based participation and fund-specific conviction across select listings.

Mutual Funds Add Fresh Picks Across Consumption, Industrials & Telecom: Beyond IPOs, mutual funds broadened their equity exposure by adding established names such as Ather Energy, Sagility, Asian Paints, Mphasis, Mahindra & Mahindra, Indus Towers, Canara Bank and Titan Company, indicating diversified buying interest across sectors.

Mutual Funds Execute Complete Exits Across Select Sectors: On the exit side, equity mutual fund schemes undertook portfolio realignments by fully exiting positions in names such as Kaynes Technology, Hero MotoCorp, NSDL, Hindalco, Bajaj Auto, Varun Beverages, Lupin, PFC, Siemens Energy, Hindustan Unilever, HDFC AMC, Glenmark Pharma, HPCL, Trent and Hyundai.

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

Mutual Funds Step Up Equity Buying, Cash Buffer Dips: Mutual Funds remained strong buyers in equities during November, stepping up equity deployment sharply to ₹43,465 Cr, including allocations to IPOs. This increased deployment nudged overall cash holdings slightly lower to ₹2.02 lakh Cr in November from ₹2.09 Lakh Cr in October.

AMC Cash Levels Ease Further in November: The average cash holding ratio across the top 20 Asset Management Companies softened to 4.06% in November, down from 4.54% in October, as equity AUM rose and market investments increased. The continued decline keeps the industry’s cash levels well below the 5% threshold, highlighting strong investor confidence, persistent risk-on sentiment and a preference among fund managers to stay more fully invested amid resilient market conditions.

PPFAS Mutual Fund continues to hold the highest cash-to-AUM ratio among equity-oriented schemes at 21.37% (₹28,992 Cr), signaling a distinctly conservative investment posture and strong flexibility for future market opportunities. Quant MF follows with a substantial 13.91% (₹12,082 Cr), while HDFC MF (6.55%) and Motilal Oswal MF (6.52%) remain comfortably above the industry average, reflecting cautious optimism.

Parag Parikh & SBI Contra Lead in Cash Proportion: Parag Parikh Flexi Cap Fund holds the highest cash-to-AUM ratio at 21.71% (₹28,178 Cr), reflecting a distinctly conservative and flexible strategy aimed at capitalizing on future market opportunities. Close behind, SBI Contra Fund maintains a substantial 19.87% (₹9,903 Cr) in cash, signalling a cautious yet opportunistic stance amid current market uncertainties. HDFC Flexi Cap Fund, with 13.81% (₹12,989 Cr), also demonstrates a prudent approach, keeping ample liquidity for tactical deployment as valuations evolve.

Contra & Flexi Cap Funds Lead the Liquidity Charts: Contra Funds top the liquidity chart with the highest cash-to-AUM ratio of 15.10% (₹11,392 Cr), reflecting a highly defensive and opportunistic positioning amid ongoing market volatility. Flexi Cap Funds follow with a strong 10.06% (₹54,905 Cr) held in cash, highlighting their tactical flexibility to deploy funds across market caps as opportunities emerge.

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

The Mutual Fund industry sustained its growth trajectory in November 2025, with Average Assets Under Management (AAUM) rising 1.91% to ₹81.32 lakh crore, supported by market gains despite softer net inflows.

Equity mutual fund inflows rose 21% month-on-month to ₹29,911 crore, marking a strong rebound driven by broad-based investor participation.

Large-cap funds staged a sharp recovery, while mid-cap, small-cap, and large & mid-cap categories also saw healthy inflows, reflecting persistent investor appetite across the equity curve.

Hybrid funds maintained strong traction with steady inflows, supported by continued interest in Arbitrage funds.

Passive fund inflows moderated during the month, indicating a shift in investor preference toward active strategies such as flexi-cap and mid-cap funds.

Debt mutual funds saw net outflows of ₹25,693 crore, reversing October’s strong inflows; however, the segment’s average AUM rose 1.96% to ₹19.81 lakh crore, aided by market gains.

SIP inflows remained robust at ₹29,445 crore, holding steady near record highs, reflecting strong retail discipline and continued preference for systematic investing.

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

November Snapshot: FPIs Turn Sellers Again, DIIs Anchor the Market, MFs Strengthen Deployments

November’s Sectoral Shifts: FPIs Turn Aggressive Buyers in Telecom & Energy

• Telecom & Oil & Gas Drive Inflows: FPIs displayed strong conviction in high-beta sectors during November, with Telecommunication topping the chart at ₹14,326 Cr, supported by sustained tariff hikes and improved cash-flow visibility. Oil & Gas followed at ₹7,169 Cr, driven by firm crude price trends and upbeat forecasts for gas transmission and refining segments. Capital Goods (₹2,495 Cr) continued to see healthy buying as industrial capex momentum remained robust, while Diversified (₹56 Cr) and Utilities (₹35 Cr) saw measured inflows.

Selling Pressure Intensifies in Consumption & IT-Heavy Sectors

• IT, FMCG & Consumer Services Witness Heavy Selling: Outflows were concentrated in defensives and consumption-oriented spaces. Information Technology recorded net selling of ₹5,794 Cr, though the second half saw some easing, hinting at tactical stabilization after months of persistent liquidation. FMCG (₹4,764 Cr) and Consumer Services (₹3,993 Cr) faced strong withdrawals through the month, reflecting concerns around slowing demand, margin pressures and stretched valuations.
• Financials & Power See Moderation in Outflows: Financial Services saw net selling of ₹3,178 Cr, with the first half accounting for a larger share of the unwinding as FPIs booked profits post strong quarterly results. Power (₹2,615 Cr) experienced outflows primarily in the early part of the month as valuations normalized across utilities and generation companies.

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

November Fortnight Review: DIIs & MFs Stay Strong as FPIs Turn Sellers Again

Strong FPI Buying Led by Telecom and Oil & Gas – FPIs turned selective buyers in early November, with Telecommunication (₹9,413 Cr) and Oil & Gas (₹2,992 Cr) driving inflows on improving sector fundamentals. Moderate interest in Capital Goods (₹788 Cr) and Realty (₹236 Cr) reflected confidence in investment and urban demand, while Diversified (₹46 Cr) and Utilities (₹8 Cr) saw modest but steady participation.

FPI Selling Concentrated in IT, Consumer Services & Healthcare – FPIs saw the sharpest outflows in Information Technology (₹4,873 Cr), followed by Consumer Services (₹2,918 Cr) and Healthcare (₹2,526 Cr) as investors trimmed defensives. Selling pressure continued in Power (₹2,512 Cr) and FMCG (₹2,042 Cr), while Financial Services (₹2,041 Cr), Consumer Durables (₹1,379 Cr) and Services (₹673 Cr) witnessed moderate profit-taking.

FPIs Turn Sellers Again in the First Half of November: Foreign Portfolio Investors (FPIs) turned net sellers in Indian equities during the first half of November 2025, reversing the buying seen in October after three months of continuous outflows. FPIs sold ₹6,092 Cr in equities, with a secondary market selloff of ₹13,925 Cr partially offset by ₹7,833 Cr of IPO purchases.

Debt Inflows Continue: FPIs also invested ₹6,398 Cr into debt during the first half of November, extending their preference for fixed-income assets amid attractive yield differentials and expectations of RBI policy easing. The steady inflows reflect a continued tilt toward stability and carry-driven opportunities.

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

Equity MFs Hit Record AUM in October: Equity mutual funds scaled a fresh peak in October, with Net AUM rising 4.41% to an all-time high of ₹35.17 lakh crore, up from ₹33.68 lakh crore in September. The broader MF industry also touched a new milestone, with Net AUM growing 2.59% to ₹79.79 lakh crore. The surge was fueled by record SIP inflows and strong market performance, underscoring sustained investor confidence.

Mutual Funds Show Strong Appetite for October IPOs: Equity mutual funds displayed healthy participation in the October IPO pipeline, selectively allocating capital to newly listed companies. Key IPO entries included LG Electronics India (155 schemes; 4.00%), Tata Capital (49 schemes; 1.04%), Lenskart Solutions (49 schemes; 1.48%), WeWork India Management (34 schemes; 12.16%), Canara HSBC Life Insurance (28 schemes; 12.05%), Canara Robeco AMC (21 schemes; 10.55%) and Rubicon Research (18 schemes; 6.41%).

Mutual Funds Add Fresh Picks Across Financials & Autos: Beyond IPOs, mutual funds broadened their equity exposure by adding established names such as The Federal Bank, Canara Bank, Shriram Finance, LTIMindtree, Hindalco Industries, TVS Motor Company and Thyrocare Technologies.

Mutual Funds Make Complete Exits Across Key Sectors: On the exit side, equity schemes realigned portfolios by fully exiting holdings in HDFC Life Insurance Company, HDB Financial Services, TCS, REC, Power Finance Corporation, Cohance Lifesciences, The Indian Hotels Company, Suzlon Energy, Lupin, Voltas, Trent, Siemens Energy India, SBI Cards and Max Healthcare Institute.

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

Modest Buying, Rising Cash Buffers – Equity MFs Turn Selective in October: Mutual Funds continued to be net buyers in equities during October, though the pace of deployment slowed sharply to ₹23,063 Cr — marking a six-month low in fresh equity investments. The cautious approach pushed overall cash holdings higher to ₹2.09 Lakh Cr, up from ₹1.99 Lakh Cr in September.

AMC Cash Ratio Dips as Equity AUM Expands: The average cash holding ratio across the top 20 Asset Management Companies edged lower to 4.54% in October, from 4.57% in September, primarily driven by a rise in equity AUM and a marginal dip from previous months. The ratio remained below the 5% mark, reflecting robust equity AUM growth and sustained investor confidence amid healthy market sentiment.

PPFAS Mutual Fund continues to hold the highest cash-to-AUM ratio among equity-oriented schemes at 22.17% (₹29,168 Cr), signaling a distinctly conservative investment posture and flexibility for future market opportunities. Quant MF follows with a substantial 11.77% (₹10,366 Cr), while ICICI & HDFC MF remains comfortably above the industry average above 6%, reflecting cautious optimism.

Parag Parikh & SBI Contra Lead in Cash Proportion: Parag Parikh Flexi Cap Fund holds the highest cash-to-AUM ratio of 22.56% (₹28,386 Cr), reflecting a distinctly conservative and flexible strategy aimed at capitalizing on future market opportunities. Close behind, SBI Contra Fund maintains 20.20% (₹9,940 Cr) in cash, signalling a cautious yet opportunistic stance amid current market uncertainties. HDFC Flexi Cap Fund, with 12.84% (₹11,692 Cr), also demonstrates a prudent approach, keeping ample liquidity for tactical deployment as valuations evolve.

Contra & Flexi Cap Funds Lead the Liquidity Charts: Contra Funds top the liquidity chart with the highest cash-to-AUM ratio of 15.19% (₹11,289 Cr), reflecting a highly defensive and opportunistic positioning amid ongoing market volatility. Flexi Cap Funds follow with 9.81% (₹52,413 Cr) held in cash, highlighting their tactical flexibility to deploy funds across market caps as opportunities arise.

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

The mutual fund industry maintained its upward momentum in October 2025, with Average Assets Under Management (AAUM) rising 2.59% to ₹79.79 lakh crore, reflecting continued investor confidence and broad-based participation.

Equity mutual fund inflows declined by 19% month-on-month to ₹24,690 crore, marking the third consecutive month of moderation, yet equity funds recorded their 56th straight month of net inflows indicating sustained investor confidence.

Large Cap funds saw the highest decline in inflows among equity categories. Hybrid funds showed a robust 51% rise in inflows.

Debt mutual funds rebounded sharply with inflows of approximately ₹1.59 lakh crore, reversing outflows seen in the previous two months, led by strong inflows into liquid funds.

Systematic Investment Plan (SIP) inflows hit a new high of ₹29,529 crore with active SIP accounts rising.

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