mutual fund flows

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.

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

FPI Flows: Equity Buying Returns After Four Months; Debt Inflows Continue but Moderate from June Peak

FPIs Return to Equity Buying in July, Supported by Strong Primary Market Participation: FPIs recorded net equity inflows of ₹20,200 Cr in July 2026, ending four consecutive months of selling. Foreign investors remained net buyers during both halves of the month, investing ₹15,559 Cr during July 1–15 and ₹4,641 Cr during July 16–31. The turnaround began in the second half of June and continued through July, indicating an improvement in foreign investor sentiment. July and February remain the only two months of CY2026 in which FPIs were net buyers in Indian equities. 

Primary Markets Account for the Majority of July Equity Inflows: FPI equity buying was largely supported by primary market and IPO investments of ₹13,468 Cr, while secondary markets attracted ₹6,732 Cr. Primary market purchases accounted for nearly two-thirds of total equity inflows, highlighting stronger foreign participation in new issuances compared with listed secondary-market equities.

July DII Buying Moderates to the Lowest Level of CY2026: Domestic Institutional Investors invested ₹35,099 Cr in Indian equities during July 2026, marking the lowest monthly buying in the current calendar year and the lowest since April 2025, when investments stood at ₹28,228 Cr. Buying remained relatively balanced across the month, with ₹17,070 Cr invested in the first half and ₹18,030 Cr in the second half.

July Mutual Fund Buying Moderates Sharply: Mutual Funds invested ₹15,182 Cr in equities during July 2026, the lowest monthly buying since February 2026, when purchases stood at ₹11,422 Cr. Investments were moderately front-loaded, with ₹8,224 Cr deployed during July 1–15 and ₹6,958 Cr during July 16–31, indicating a gradual slowdown in buying momentum during the month.

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

July Fortnight Review: FPIs Turn Net Buyers; DII & MF Buying Momentum Moderates

FPI Buying: Broad-Based Inflows Across Consumption, Commodities and Healthcare – During 1st–15th July 2026, FPI activity turned distinctly positive, with buying spread across several sectors. Consumer Services attracted the highest inflow of ₹7,361 Cr, followed by Metals & Mining at ₹5,993 Cr and Healthcare at ₹4,101 Cr. FPIs also purchased Services worth ₹2,405 Cr, Consumer Durables ₹2,384 Cr, Realty ₹2,072 Cr, Financial Services ₹1,975 Cr and Construction Materials ₹1,574 Cr. This indicates renewed FPI interest in consumption-linked sectors, commodities, healthcare and domestic-growth themes.

FPI Selling: Automobile and Capital Goods Lead FPI Selling –

Selling was relatively concentrated, led by Automobile with an outflow of ₹6,936 Cr, followed by Capital Goods at ₹2,657 Cr and Telecommunication at ₹2,454 Cr. FPIs also reduced exposure to Power by ₹1,267 Cr and FMCG by ₹1,106 Cr, while selling in Media, Chemicals and Forest Materials remained limited.

FPI Equity Buying Resumes: FPIs invested ₹15,559 Cr during 1st–15th July 2026, extending the ₹14,110 Cr buying seen in the second half of June. Inflows included ₹6,621 Cr in secondary markets and ₹8,938 Cr through primary markets/IPOs, indicating an improvement in foreign investor sentiment after four months of selling.

FPI Debt Flows Stay Positive: After record debt inflows of ₹55,518 Cr in June 2026, the positive momentum continued in the first half of July, with FPIs investing another ₹9,066 Cr, taking CY2026 debt inflows to ₹72,850 Cr. July inflows were led by Debt FAR at ₹7,234 Cr and Debt General at ₹3,946 Cr, partly offset by a ₹2,114 Cr outflow from Debt VRR. Continued buying through the FAR and General routes indicates that June’s tax incentives, wider FAR eligibility and regulatory easing remain supportive of foreign demand for Indian government debt.

DII Buying Slows, but CY2026 Investment Hits Record: DIIs invested ₹17,070 Cr during 1st–15th July 2026, only slightly above ₹15,264 Cr in the second half of June, while FPI flows also turned positive during the period. Despite slower fortnightly purchases, cumulative DII equity investment reached a record ₹4,77,808 Cr till 15th July 2026, reinforcing domestic liquidity as the market’s key structural support.

MFs Remain Net Buyers: Mutual funds invested ₹8,224 Cr in equities during 1st–15th July 2026, indicating a moderation in buying momentum continuing the moderation observed since the second half of June. Despite the slower fortnightly inflow, cumulative mutual fund equity investment in CY2026 rose to a record YTD investment of ₹3,02,668 Cr, crossing the ₹3 lakh crore mark and reinforcing their continued support to domestic equities.

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

Mid Cap Funds Join the ₹5 Lakh Crore AUM Club: Mid Cap Funds crossed the ₹5 lakh crore AUM milestone for the first time, with net assets reaching ₹5.06 lakh crore in June. Flexi Cap Funds remained the largest equity mutual fund category for the eighth consecutive month, with net AUM of ₹5.81 lakh crore, followed by Sectoral and Thematic Funds at ₹5.47 lakh crore. With Mid Cap Funds joining the group, three equity fund categories now manage assets exceeding ₹5 lakh crore each, underscoring sustained investor interest in diversified, sector-focused and mid-cap strategies.

Equity Mutual Fund AUM Reaches a New Record High: Equity mutual funds’ net AUM rose 3.3% MoM to a record ₹37.34 lakh crore in June, compared with ₹36.14 lakh crore in May, supported by gains across the broader equity market. Despite the mutual fund industry recording net outflows during the month, its overall net AUM increased 0.8% MoM to ₹82.22 lakh crore, aided by market appreciation. Most mutual fund categories witnessed an increase in assets, while debt funds remained the key exception, registering a decline during June.

MFs Add Fresh Exposure Across Infrastructure, New-Age, Industrials and IPO Names: Equity mutual funds initiated fresh positions across a diversified set of companies in June, led by JSW Infrastructure, which was added by 41 schemes, followed by InterGlobe Aviation, Acme Solar Holdings, Meesho and Billionbrains Garage Ventures. Strong additions were also recorded in Craftsman Automation, Oracle Financial Services Software, Bharti Hexacom, Coforge, JSW Steel, Dixon Technologies, Ashok Leyland and Tata Motors, indicating broad-based interest across infrastructure, aviation, renewable energy, digital platforms, industrials, telecom, IT, electronics manufacturing and automobiles. Among the larger additions, mutual funds collectively acquired 7.20% of Acme Solar Holdings, 5.12% of Craftsman Automation, 4.95% of JSW Infrastructure and 4.71% of Pine Labs. Turtlemint Fintech Solutions, an IPO stock, was added by 12 schemes, which collectively acquired 3.26% of the company, highlighting selective participation in new-age fintech and IPO-led opportunities.

MFs Exit Energy, Metals, IT and Large-Cap Names Amid Portfolio Rotation: On the exit side, several schemes exited NTPC, Tata Steel, Hindalco Industries, Oil India, ONGC and Reliance Industries, indicating portfolio reshuffling across energy and metals. Other notable exits included UltraTech Cement, PB Fintech, NALCO, Infosys, TCS, ICICI Prudential AMC, Jindal Steel and Bharat Electronics, reflecting selective reduction in exposure across cement, fintech, exchanges, IT, metals and defence.

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

Equity Buying Moderates in June; Cash Holdings Fall to Calendar-Year Low: Mutual funds remained strong domestic buyers, investing ₹50,643 crore in equities during June 2026, though purchases moderated from ₹60,597 crore in May. Overall equity-oriented mutual fund cash holdings declined to ₹1.84 lakh crore in June from ₹1.89 lakh crore in May, marking the lowest level of the calendar year and indicating continued cash deployment as net equity purchases remained higher than net inflows into equity-oriented schemes.

AMC Cash Levels Fall to Calendar-Year Low: The average cash holding ratio across the top 20 AMCs declined to 4.53% in June from 4.79% in May, marking the lowest level of the calendar year. The continued reduction indicates greater cash deployment and a stronger preference to remain invested, reflecting improving market confidence while maintaining adequate liquidity to manage volatility and capture emerging opportunities.

PPFAS Mutual Fund holds the highest cash-to-AUM ratio at 16.10%, with ₹24,107 Cr in cash, reflecting a distinctly defensive stance and strong deployment flexibility. Quant MF follows closely with 15.67% cash holdings (₹14,007 Cr), while DSP MF (6.44%) and Axis MF (6.38%) also maintain elevated liquidity buffers.

Parag Parikh Flexi Cap Fund Leads in Absolute Cash Holdings : Parag Parikh Flexi Cap Fund holds the largest cash reserve at ₹23,630 crore (16.48% of AUM), followed by HDFC Mid Cap Fund at ₹7,990 crore (7.92%) and HDFC Flexi Cap Fund at ₹6,370 crore (5.98%).

Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category with 9.59% of AUM or ₹7,002 Cr in cash, reflecting a cautious yet opportunity-driven stance. Flexi Cap Funds hold the largest absolute cash pile at ₹41,552 Cr, equivalent to 7.14% of AUM, providing significant flexibility for tactical deployment.

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

The Mutual Fund industry’s Average AUM hit an all-time high of ₹84.18 lakh cr in June, up from ₹83.47 lakh cr in May, despite net outflows of ₹52,949 cr, primarily driven by heavy redemptions from debt-oriented schemes.

Equity-oriented mutual fund inflows rebounded 26.5% MoM to ₹28,973 cr in June 2026, from ₹22,908 cr in May, signalling a recovery in investor appetite. Mid-cap funds led inflows at ₹6,090 cr, followed by Small-cap funds at ₹5,602 cr and Flexi-cap funds at ₹5,231 cr, while Large-cap inflows also strengthened to ₹2,067 cr.

Debt mutual fund outflows crossed ₹1 lakh cr in June, widening to ₹1.09 lakh cr from ₹96,949 cr in May and marking the second consecutive month of heavy redemptions. 

Liquid funds led the withdrawals at ₹42,293 cr, followed by Low Duration, Ultra Short Duration, Money Market and Overnight funds. The withdrawals likely reflected quarter-end institutional liquidity requirements and tax-related treasury operations. Market participants generally view these as seasonal flows rather than a structural deterioration in debt-fund sentiment.

Mutual fund SIP inflows rose to a three-month high of ₹31,781 cr in June, just below the all-time high of ₹32,087 cr recorded in March. Contributions grew 2.7% MoM, reflecting resilient retail participation despite market volatility.

Gold ETFs staged a sharp comeback in June, attracting ₹3,443 cr in net inflows after witnessing ₹725 cr of outflows in May.

Other ETFs led with ₹13,238 cr, driven by Domestic Equity ETFs at ₹8,576 cr and Silver ETFs at ₹4,286 cr. Meanwhile, Index Funds recorded marginal outflows of ₹59 cr, as inflows into Domestic Equity Index Funds were offset by redemptions from debt-oriented index funds.

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

Market Cap Cutoffs Remain Elevated in AMFI’s July 2026 Categorisation: AMFI’s latest stock categorisation, based on average market capitalisation during Jan–Jun 2026, indicates that market-cap thresholds remain elevated. The Large Cap cutoff, based on average market capitalisation over the last six months, has edged up to approximately ₹1,06,300 crore from ₹1,05,000 crore in January 2026. In contrast, the Mid Cap cutoff has moderated slightly to around ₹33,500 crore from ₹34,700 crore, reflecting a relatively stable Large Cap threshold alongside some easing at the lower end of the Mid Cap universe.

AMFI’s Latest: 9 Stocks Enter the Large Cap Basket: In AMFI’s latest stock categorisation, eight names have been upgraded from Mid Cap to Large Cap—BSE, Vodafone Idea, Hitachi Energy India, Jindal Steel, Indian Bank, Indus Towers, Billionbrains Garage Ventures (Groww) and BHEL—as their six-month average market capitalisation moved above the Large Cap cutoff of around ₹1.06 lakh crore. Alongside these upgrades, Vedanta Aluminium Metal Ltd. (VAML) has been newly included in the Large Cap bucket based on market-cap eligibility.

For more details read through our comprehensive report