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

September Fortnight Review: FPI Equity Buying Streak Ends; Debt Selling Intensifies, DIIs Stay Supportive

FPIs Turn Defensive in First Half of September; Financials Reverse to Selling While Healthcare Buying Continues

FPI Buying: Healthcare Leads Inflows for the Fifth Consecutive Fortnight – During 1st–15th September 2026, FPI buying was selective, with Healthcare attracting the highest inflow of ₹2,114 Cr, extending its buying streak to 5 consecutive fortnights. Continued foreign interest in healthcare may reflect the sector’s structural growth prospects, defensive characteristics and rising domestic demand. FPIs also purchased Construction worth ₹930 Cr, Services ₹905 Cr, Consumer Services ₹422 Cr, Chemicals ₹228 Cr, Utilities ₹194 Cr, Textiles ₹10 Cr and Forest Materials ₹7 Cr.

FPI Selling: Financial Services Reverses After Two Fortnights of Buying – FPI Selling: Financials Reverse After Two Fortnights of Buying: Financial Services saw the highest outflow of ₹6,204 Cr, reversing two fortnights of buying. FPIs also sold Auto ₹2,670 Cr, Oil & Gas ₹2,385 Cr, FMCG ₹2,029 Cr and Power ₹1,653 Cr, with Oil & Gas selling extending to a second consecutive fortnight.

FPI Equity Flows Turn Negative: FPIs sold ₹14,116 Cr of Indian equities during 1st–15th September 2026, bringing an end to their five consecutive fortnights of buying streak. The selling was concentrated in the secondary market, with outflows of ₹15,545 Cr, while FPIs continued to participate in the primary market/IPOs with net buying of ₹1,429 Cr, partially cushioning the overall outflow.

FPI Debt Selling Intensifies: FPIs recorded ₹7,662 Cr of debt outflows during the first half of September, marking the third consecutive fortnight of selling. Importantly, the quantum of debt selling has increased in each of the last three fortnights, indicating continued reduction in foreign investor exposure to Indian fixed-income securities.

Domestic Institutions Continue to Provide Market Support – DII Buying Streak Continues: DIIs remained consistent buyers, investing ₹27,673 Cr in equities during 1st–15th September 2026. Their cumulative equity purchases reached a substantial ₹5,82,012 Cr in CY2026, continuing to provide strong domestic liquidity support to the market.

Mutual Fund Equity Buying Moderates – MFs Remain Net Buyers, but Buying Moderates: Mutual funds invested ₹15,348 Cr in equities during 1st–8th September 2026, lower than the previous fortnight, indicating a moderation in the pace of buying. Cumulative mutual fund equity investment in CY2026 reached ₹3,78,369 Cr, continuing to provide strong domestic support to Indian equities.

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

Flexi Cap Funds Cross ₹6.1 Lakh Crore AUM, Retain Top Spot: Flexi Cap Funds’ net AUM rose to a fresh high of ₹6.11 lakh crore in August, from ₹6.00 lakh crore in July, and the category remained the largest equity mutual fund segment for the tenth consecutive month. Mid Cap Funds followed at ₹5.43 lakh crore, up from ₹5.23 lakh crore in July, making Flexi Cap and Mid Cap Funds the only two equity categories with AUM above ₹5 lakh crore each, reflecting sustained investor preference for diversified and mid-cap strategies.

Equity Mutual Fund AUM Scales a Fresh Record High in August: Equity mutual funds’ net AUM rose 2.21% MoM to a record ₹39.21 lakh crore in August, from ₹38.36 lakh crore in July, marking an increase of nearly ₹85,000 crore during the month. The rise was supported by ₹29,329 crore of net equity inflows along with market appreciation, pushing equity assets to another all-time high.

Mutual Funds Show Strong Appetite for August IPOs and LIC OFS: Equity mutual funds showed strong participation in the LIC OFS, with 71 schemes adding LIC as a new portfolio holding and collectively acquiring 1.49% of the company. Funds also actively participated in August’s new listings, building fresh exposure to Dhoot Transmission (61 schemes; 10.48% stake acquired), Shiprocket (45; 9.59%), Symbiotec Pharmalab (38; 4.95%), Milky Mist Dairy Food (24; 4.56%), Molbio Diagnostics (20; 4.12%) and Lumino Industries (19; 5.23%). The relatively higher stakes acquired in Dhoot Transmission and Shiprocket indicate comparatively stronger mutual fund participation in these new listings.

Mutual Funds Add Fresh Picks Across Fintech, Financials & Industrials: Beyond IPOs, several schemes initiated exposure to One97 Communications, Piramal Finance, Tenneco Clean Air India, SPR Auto Technologies, Apar Industries, Hindustan Copper, PB Fintech and BSE, signalling diversified buying across fintech, financial services, auto components, industrials, metals and capital-market businesses.

MF Schemes Record Full Exits Across Financials, IT, Pharma, Auto and Select Large-Cap Names: On the exit side, several schemes fully exited positions in Power Finance Corporation, Lupin, Tech Mahindra, Maruti Suzuki, Godrej Consumer Products and Sun Pharmaceutical Industries, indicating portfolio reshuffling across financials, pharmaceuticals, IT, automobiles and consumption. Other notable exits included Infosys, Swiggy, GE Vernova T&D India, Vishal Mega Mart, Tata Motors Passenger Vehicles, Hero MotoCorp, Oil India and Tata Consultancy Services, reflecting selective reduction in exposure across technology, industrials, consumer, auto and energy sectors.

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

Equity Buying Surges; Cash Holdings Decline: Mutual funds invested ₹56,979 crore in equities during August 2026, sharply higher than ₹11,698 crore in July, indicating a strong pick-up in equity deployment. Overall equity-oriented mutual fund cash holdings declined to ₹1.84 lakh crore in August from ₹1.92 lakh crore in July, reflecting increased deployment of available liquidity. With equity purchases significantly exceeding ₹29,329 crore of net equity fund inflows, fund managers appear to have deployed a portion of their existing cash reserves into equities.

AMC Cash Levels Decline Marginally in August: The average cash holding ratio across the top 20 AMCs declined to 4.49% in August from 4.66% in July, marking a 17 bps fall. The decline suggests a modest deployment of cash into equities, indicating slightly improved investment activity among fund houses while still maintaining adequate liquidity to manage market volatility and capitalize on emerging opportunities.

PPFAS Mutual Fund holds the highest cash-to-AUM ratio at 15.52%, with ₹23,876 Cr in cash, closely followed by Quant MF at 15.41% with ₹14,322 Cr. The elevated liquidity levels indicate a relatively cautious stance and provide greater flexibility to deploy capital as opportunities emerge.

In absolute terms, PPFAS MF holds the largest cash reserve at ₹23,876 Cr, followed by SBI MF with ₹21,864 Cr (2.75%), HDFC MF with ₹21,413 Cr (4.18%), and ICICI Prudential MF with ₹16,845 Cr (2.91%), highlighting sizeable liquidity buffers across the larger fund houses.

Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category at 9.35% of AUM (₹7,101 Cr), reflecting a cautious yet opportunity-driven approach, while Flexi Cap Funds hold the largest absolute cash pile of ₹42,849 Cr (7.00% of AUM), providing fund managers with significant flexibility for tactical deployment across market segments.

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

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

Industry Average AUM at a fresh all-time high of ₹88.31 lakh cr in August, up from ₹86.34 lakh cr in July.

Net inflows moderated to ₹41,354 cr from ₹2.36 lakh cr, as the debt book gave back July’s quarter-start surge.

Equity inflows rose 18.8% MoM to ₹29,329 cr, the 66th straight month of net inflows.

Small-cap funds led again with a record ₹7,973 cr, while Large-cap funds stayed in outflow for a second month at ₹1,147 cr.

Hybrid inflows eased to ₹10,045 cr, with Arbitrage funds falling to ₹3,789 cr from ₹6,502 cr.

Gold ETF inflows rose to ₹2,597 cr from ₹1,559 cr; Silver ETFs disclosed separately for the first time at ₹1,271 cr.

Debt funds reversed to an ₹8,127 cr outflow, led by Overnight funds at ₹30,654 cr.

SIP contributions at a record ₹32,297 cr, with contributing SIP accounts crossing 10 crore for the first time.

AMFI restructured its Monthly Report from August — eight sections from five, and SIP data now disclosed at category level for the first time.

For more details read through our comprehensive report.

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

August 2026 was a steepening month rather than a sell-off month — the front end rallied hard on an unplanned liquidity surge while the long end sold off on inflation and global rate cues. The focus now shifts to the August CPI print, the second-half borrowing calendar and the 7 October policy review. With the FCNR(B) swap window now closed, participants are favoring accrual and low-duration strategies, adding duration only on a clear policy or oil trigger.

The 10-year government bond yield rose 11 bps to 6.95% and the 5-year 13 bps to 6.58%, with the move concentrated in the final two weeks of the month.

Banking system liquidity surplus hit a record — the RBI absorbed ₹11,16,006.50 crore on 6 September — after the FCNR(B) swap window drew about $127 billion in deposits, nearly five times the $26 billion raised in 2013. August’s daily average surplus of ₹3.67 lakh crore was more than three times July’s ₹1.07 lakh crore, pulling the call rate down 19 bps to 5.18% and T-Repo 30 bps to 4.96%, below the SDF floor.

Short-end rates have kept falling into September, with the 3-month CD at 5.9% by 3 September, roughly 90 bps below where August began. VRRR take-up stays weak — a ₹6 lakh crore seven-day auction drew just ₹1.14 lakh crore — and the market now expects longer-tenor VRRR and OMO sales before any CRR hike.

The RBI has conducted 32 VRRR auctions since the start of August, with tenors from overnight to 14 days and cut-offs pinned at 5.24% throughout, but take-up has consistently fallen short — a ₹10 lakh crore combined offer on 31 August drew only ₹3.84 lakh crore, and a ₹6 lakh crore seven-day auction drew ₹1.14 lakh crore.

With the surplus at ₹10.32 lakh crore and the call rate down to 4.93%, below the SDF floor, the Bank escalated to a 30-day ₹7 lakh crore VRRR on 7 September carrying an early-exit option — a concession to banks reluctant to lock up cash, though ICICI Securities PD warns the redemption option costs the RBI control over the drain.

Debt fund returns split cleanly by duration — liquid, money market and ultra-short categories held firm while gilt and long duration funds posted negative one-month returns. Credit Risk funds led every window of six months and longer, and Debt Plus Arbitrage FoFs placed second over three years.

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

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

FPI Flows: Equity Buying Momentum Continues, While Three-Month Debt Buying Streak Ends 

FPIs Extend Equity Buying for the Second Straight Month: FPIs recorded net equity inflows of ₹29,631 Cr in August 2026, extending the buying momentum for the second straight month after four consecutive months of outflows. Foreign investors remained net buyers in both halves of the month, investing ₹16,621 Cr during August 1–15 and ₹13,010 Cr during August 16–31. In CY2026, FPIs have recorded positive equity flows only in February, July and August, showing an improvement in sentiment, though foreign participation remains selective.

FPIs Turn Sellers in Debt, Breaking Three Consecutive Months of Buying: FPIs recorded net debt outflows of ₹1,457 Cr in August, ending a three-month streak of positive debt flows. Selling was relatively modest at ₹340 Cr during August 1–15, but accelerated to ₹1,117 Cr during August 16–31, indicating that the pressure was concentrated in the second half of the month. August also marked only the third month of net FPI debt selling in CY2026, suggesting that foreign appetite for Indian fixed income remains relatively resilient despite the monthly reversal.

Financial Services Leads FPI Buying; Consumer Services and Healthcare See Strong Inflows: FPI buying in August 2026 was led by Financial Services, which attracted net purchases of ₹10,494 Cr, with ₹6,535 Cr in the first half and ₹3,959 Cr in the second half. Consumer Services followed with strong inflows of ₹8,417 Cr, with buying accelerating to ₹5,019 Cr in the second half from ₹3,398 Cr in the first half. Healthcare also remained a preferred sector, attracting net purchases of ₹5,931 Cr during the month.

Telecommunication Faces Sustained Selling; FMCG and Oil & Gas Weaken Sharply: On the selling side, Telecommunication witnessed the highest FPI outflows of ₹4,983 Cr, with selling continuing across both halves of August. FMCG recorded net outflows of ₹1,916 Cr, with selling accelerating sharply in the second half. Oil, Gas & Fuels reversed from ₹490 Cr of first-half buying to ₹2,251 Cr of second-half selling, resulting in net outflows of ₹1,761 Cr, while Power also witnessed sustained selling of ₹1,553 Cr.

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

August Fortnight Review: FPIs Extend Equity Buying; DII Buying Moderates, MF Buying Strengthens

FPI Buying: Financial Services and Automobiles Lead Inflows – During 1st–15th August 2026, FPI buying remained broad-based across several sectors. Financial Services attracted the highest inflow of ₹6,535 Cr, followed by Automobile & Auto Components at ₹4,405 Cr and Consumer Services at ₹3,398 Cr. FPIs also purchased Healthcare worth ₹2,910 Cr, Information Technology ₹2,530 Cr, Consumer Durables ₹1,472 Cr, Metals & Mining ₹720 Cr and Services ₹590 Cr. This reflects stronger FPI interest in financials, automobiles, consumption and healthcare, alongside renewed buying in IT.

FPI Selling: Telecom, Capital Goods and Power Lead FPI Outflows – Selling was relatively concentrated, led by Telecommunication with an outflow of ₹3,322 Cr, followed by Capital Goods at ₹1,556 Cr, Power at ₹1,164 Cr and Realty at ₹1,014 Cr. FPIs also reduced exposure to Construction by ₹404 Cr and FMCG by ₹189 Cr, while selling in Diversified and Forest Materials remained marginal.

FPI Equity Buying Continues: FPIs invested ₹16,621 Cr during 1st–15th August 2026, continuing the buying trend after turning net buyers in July. Inflows comprised ₹11,199 Cr in secondary markets and ₹5,422 Cr through primary markets/IPOs, indicating sustained improvement in foreign investor sentiment.

FPI Debt Flows Turn Marginally Negative: FPIs recorded a small ₹340 Cr debt outflow during the first half of August. Despite the marginal withdrawal, cumulative CY2026 debt flows remained strongly positive at ₹82,105 Cr, continuing to provide a cushion against equity outflows.

DII Buying Remains Moderate: DIIs invested ₹17,287 Cr during 1st–15th August 2026, broadly in line with ₹17,070 Cr in the first half of July, while FPI flows also remained positive. Cumulative DII equity investment crossed the ₹5 lakh Cr milestone, reaching a record ₹5,13,124 Cr till 15th August 2026, reinforcing domestic institutional liquidity as a key structural support for Indian equities.

MFs Remain Strong Net Buyers: Mutual funds invested ₹27,887 Cr in equities during 1st–15th August 2026, rising sharply from ₹8,224 Cr in the first half of July. Cumulative mutual fund equity investment in CY2026 reached a record ₹3,33,929 Cr, reinforcing strong domestic institutional support for Indian equities.

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

Flexi Cap Funds Reach the ₹6 Lakh Crore AUM: Flexi Cap Funds reached the ₹6 lakh crore AUM milestone for the first time, with net assets reaching ₹6.00 lakh crore in July. The category remained the largest equity mutual fund segment for the ninth consecutive month, followed by Sectoral & Thematic Funds at ₹5.62 lakh crore and Mid Cap Funds at ₹5.23 lakh crore. These are now the only three equity fund categories with AUM above ₹5 lakh crore each, highlighting sustained investor preference for diversified, thematic and mid-cap strategies.

Equity Mutual Fund AUM Reaches a New Record High: Equity mutual funds’ net AUM rose 2.74% MoM to a record ₹38.36 lakh crore in July, from ₹37.34 lakh crore in June, supported by gains across the broader equity market. Meanwhile, the mutual fund industry’s overall net AUM increased 4.3% MoM to ₹85.76 lakh crore, aided by market appreciation across both equity and debt assets.

Mutual Funds Show Strong Appetite for July IPO Additions: Equity mutual funds displayed healthy participation in newly listed companies, building fresh exposure to Indo-MIM (79 schemes; 8.40% company stake acquired), SBI Funds Management (72; 1.57%), Manipal Health Enterprises (44; 1.95%), Kusumgar (19; 5.90%) and Lohia Corp (17; 12.79%). Broad scheme participation, particularly in Indo-MIM and SBI Funds Management, highlights strong institutional interest in select IPOs, while the relatively higher stakes acquired in Lohia Corp and Indo-MIM indicate stronger mutual fund conviction in these new listings.

Mutual Funds Add Fresh Picks Across Pharma, Industrials & New-Age Businesses: Beyond IPOs, several schemes initiated exposure to Torrent Pharmaceuticals, Adani Enterprises, Diamond Power Infrastructure, Biocon, Swiggy, Belrise Industries and One97 Communications, alongside Shadowfax Technologies, Prestige Estates Projects and 360 One WAM, signalling diversified buying across pharmaceuticals, industrials, digital consumption, real estate and financial services.

MF Schemes Record Full Exits Across Energy, Metals, Financials and Select Large-Cap Names: On the exit side, several schemes fully exited positions in Vedanta Power, Vedanta Oil and Gas, Vedanta Iron and Steel, Kotak Mahindra Bank, Bank of Baroda and Muthoot Finance, indicating portfolio reshuffling across energy, metals and financials. Other notable exits included Tata Steel, Vedanta, Hindustan Petroleum, GE Vernova T&D India, Larsen & Toubro, Angel One, Indian Bank, Bandhan Bank and Trent, reflecting selective reduction in exposure across commodities, industrials, banking, capital markets and consumption.

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

Equity Buying Slows to Five-Month Low; Cash Holdings Rise: Mutual funds invested ₹16,256 crore in equities during July 2026, marking the lowest monthly buying since February 2026, when purchases stood at ₹11,422 crore. Overall equity-oriented mutual fund cash holdings increased to ₹1.92 lakh crore in July from the calendar-year low of ₹1.84 lakh crore in June, indicating relatively cautious deployment as net equity purchases remained below net inflows into equity-oriented schemes.

AMC Cash Levels Rise Marginally in July: The average cash holding ratio across the top 20 AMCs increased to 4.66% in July from 4.53% in June, marking a 13 bps rise. The increase suggests a modest build-up in liquidity, indicating a slightly more cautious stance among fund houses while retaining sufficient cash to manage market volatility and capitalize on emerging investment opportunities.

PPFAS Mutual Fund holds the highest cash-to-AUM ratio at 16.32%, with ₹25,291 Cr in cash, closely followed by Quant MF at 16.16% with ₹14,740 Cr. The elevated liquidity levels indicate a relatively cautious stance and provide greater flexibility to deploy capital as opportunities emerge.

Parag Parikh Flexi Cap Fund Leads in Absolute Cash Holdings: Parag Parikh Flexi Cap Fund holds the largest cash reserve at ₹24,794 Cr (16.70% of AUM), followed by HDFC Mid Cap Fund at ₹7,290 Cr (6.93%) and HDFC Flexi Cap Fund at ₹6,433 Cr (5.81%).

Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category at 9.18% of AUM (₹6,809 Cr), reflecting a cautious yet opportunity-driven approach, while Flexi Cap Funds hold the largest absolute cash pile of ₹44,934 Cr (7.47% of AUM), providing fund managers with significant flexibility for tactical deployment across market segments.

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

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

Industry Average AUM at a fresh all-time high of ₹86.34 lakh cr in July, up from ₹84.18 lakh cr in June.

Net inflows of ₹2.36 lakh cr, reversing two consecutive months of outflows.

Equity inflows moderated 14.8% MoM to ₹24,697 cr, the 65th straight month of net inflows.

Small-cap funds led with a record ₹7,768 cr, while Large-cap funds saw their first outflow in nearly three years.

Hybrid inflows eased to ₹11,491 cr, with Arbitrage funds leading at ₹6,502 cr.

Gold ETF inflows more than halved to ₹1,559 cr; Index Funds back in positive territory at ₹1,537 cr.

Debt funds swung to a ₹1.88 lakh cr inflow, led by Liquid funds at ₹1.19 lakh cr.

SIP contributions at a four-month high of ₹31,961 cr, a fifth consecutive month above ₹30,000 cr.

For more details read through our comprehensive report.