Mutual Funds Reduce Stakes in 9 of 10 Indian IT Stocks While ₹4 Lakh Crore Remains Invested

Mutual funds trimmed exposure to most Indian IT companies during January 2026 as concerns grew that artificial intelligence could reshape the outsourcing model that underpins the industry. 

Mutual Fund Activity in January 2026 

Data from Prime Database show that total IT holdings fell to ₹395,404 crore at the end of January, down from ₹397,310 crore in December.  

The reduction reflects net selling across the sector, with the most active seller being ICICI Prudential Asset Management, which off‑loaded an estimated ₹1,953 crore of Infosys shares and ₹783 crore of Tata Consultancy Services (TCS) shares during the month. 

Major Companies Affected 

Infosys saw a decline of 27% from its 52‑week high, while TCS fell 30% and HCL Tech dropped 18%. Net outflows in January were ₹302.53 crore for TCS, ₹966.71 crore for Tech Mahindra and ₹817.35 crore for HCL Tech.  

Other large cap names such as Oracle Financial Services Software, Coforge and Wipro also recorded declines of at least 30% from their recent peaks. 

Read More: Best Small Cap Mutual Funds for February 2026: Quant, Nippon India, Bandhan and More Lead Based on 5-Year CAGR! 

Buying Interest in Wipro 

Unlike the broader sell‑off, Wipro attracted buying from both ICICI Prudential Mutual Fund and Quant Mutual Fund, which added to their existing positions. This was the only major IT stock to see net purchases during the period. 

Overall Sector Exposure 

Despite the selling pressure, mutual funds continue to hold roughly ₹4,00,000 crore in the Indian IT sector. Large cap IT stocks are trading at about 18 times estimated fiscal 2027 earnings, a level above the multiples observed during previous market slowdowns. 

Conclusion 

January 2026 saw mutual funds reduce stakes in nine of ten leading Indian IT companies, yet the sector remains a significant component of fund portfolios with an exposure of around ₹4,00,000 crore. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.