Sector Spotlight: Where India’s Mutual Funds Are Buying and Selling

Mutual fund cash allocations in India, measured as a percentage of total Assets Under Management (AUM), remained largely unchanged in February compared with January, according to a recent analysis by brokerage firm JM Financial noted by CNBC- TV18.

In terms of sector exposure, mutual funds were overweight relative to the BSE 200 index in Pharma & Healthcare, e-Commerce, Consumer Durables, Capital Goods, and Agrochemicals & Petrochemicals. Conversely, they remained underweight in Private Banks, Oil & Gas, Metals & Mining, Consumer Staples, and IT Services.

Key Buying Trends

Private banks emerged as the top recipient of mutual fund inflows in February, attracting ₹16,412 crore. HDFC Bank, ICICI Bank, Kotak Mahindra Bank, IndusInd Bank, and Bandhan Bank were among the top picks, while selling activity was noted in Axis Bank, IDFC First Bank, and Karur Vysya Bank.

The IT Services sector also saw significant inflows, totaling ₹12,741 crore. Key buying was observed in Infosys, HCLTech, Coforge, TCS, and Fractal Analytics, while Wipro, Tech Mahindra, and Tata Elxsi saw net selling.

The e-Commerce sector received ₹8,108 crore in mutual fund inflows, with purchases in Eternal, PB Fintech, Paytm, Swiggy, and Groww, while selling occurred in Nykaa, Delhivery, and IndiaMART.

Sectors Seeing Outflows

Among sectors facing net selling, PSU Banks experienced outflows of around ₹9,000 crore. SBI, Union Bank, and Punjab & Sind Bank were sold off the most, whereas Canara Bank, PNB, and Bank of Baroda attracted fresh buying.

NBFCs saw net sales of ₹6,127 crore, driven by Bajaj Finance, Jio Finance, and BSE, while MCX and 360 ONE WAM attracted buying interest.

Other sectors witnessing selling in February included Auto & Ancillaries (-₹3,342 crore), Metals & Mining (-₹2,807 crore), and Engineering & Construction (-₹2,694 crore).

Also Read: Retail Investors Keep SIPs on Track Despite Volatile Markets: ICRA Analytics

Nifty 50 Highlights

Within the Nifty 50, mutual funds were major buyers of HDFC Bank (₹7,232 crore), ICICI Bank (₹5,649 crore), Infosys (₹5,614 crore), Eternal (₹3,287 crore), and Kotak Bank (₹3,100 crore). On the other hand, significant selling was recorded in SBI (-₹8,914 crore), L&T (-₹2,541 crore), Bajaj Finance (-₹2,215 crore), Power Grid (-₹2,211 crore), and Bharat Electronics (-₹1,526 crore).

Disclaimer: This blog has been written exclusively for educational purposes. The securities 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 in the securities market are subject to market risks, read all the related documents carefully before investing.