In March 2025, mutual funds (MFs) remained active in the Indian stock market despite a slight dip in overall equity flows compared to February. With a sharp eye on opportunity across sectors, fund managers selectively picked high-potential stocks and trimmed exposure where caution was warranted. The month witnessed Rs 23,500 crore worth of net equity investments by the top 20 mutual fund houses, reflecting growing confidence in India’s economic resilience.
Let’s take a deep dive into what mutual funds bought and sold in March — across large-cap, mid-cap, and small-cap segments — and what this means for retail investors.
Top Mutual Fund Buying Trends: Sectoral Bets Stay Strong
MFs showed continued bullishness in sectors like financial services, capital goods, consumer staples, and utilities, while maintaining an overweight stance on banks, autos, telecom, PSU banks, healthcare, and insurance. Their strategy was evident in both primary and secondary market actions across varied market capitalisations.
According to Motilal Oswal’s latest Fund Folio, mutual funds were:
- Net buyers in 52% of Nifty 50 stocks
- Buyers in 53% of Nifty Midcap 100 stocks
- Heavily invested in 71% of Nifty Smallcap 100 stocks
Large-Cap Action: Jio Financial, Zomato, Tata Consumer in Spotlight
🔼 Top Buys in Nifty 50:
- Jio Financial Services: MFs added 6.1 crore shares, a strong 18% increase, pushing the total investment to a whopping Rs 9,150 crore. This reflects strong belief in Jio’s long-term fintech potential.
- Tata Consumer Products: Another favorite, with 1.03 crore shares added (+12.8%). The value of MF holding now stands at Rs 9,080 crore.
- Zomato (Eternal): Mutual funds picked up 16.5 crore shares, marking a 10.2% increase in holdings. Their investment now tops Rs 36,090 crore, underlining faith in India’s digital consumption boom.
🔽 Top Sells in Nifty 50:
- Hindalco Industries: MFs trimmed their position by 6.3%, amid sectoral headwinds.
- Kotak Mahindra Bank: Saw a 5.3% drop in MF holdings — possibly a tactical reallocation within the BFSI space.
- JSW Steel: Mutual funds reduced exposure by 4.5%, signaling caution in cyclical metal stocks.
Mid-Cap Moves: Yes Bank, Patanjali Foods, HUDCO Catch Attention
The Nifty Midcap 100 space saw heightened MF activity in financials and industrials.
🔼 Major Midcap Buys:
- Yes Bank: A stunning 47.9% rise in MF shareholding, signaling potential revival optimism.
- HUDCO: Holdings jumped by 55.6%, possibly reflecting interest in infra-focused plays.
- Patanjali Foods: A 21.9% increase in MF exposure hints at confidence in India’s FMCG and wellness sectors.
- IDFC First Bank: MFs hiked stakes by 22.7%, further reinforcing confidence in next-gen private banking.
🔽 Notable Midcap Exits:
- Adani Total Gas: Saw 52.2% reduction in MF holdings — possibly due to valuation concerns or regulatory overhang.
- India Renewables, Ola Electric, and Godrej Properties also saw notable selling ranging from 12.5% to 23.2%.
Small-Cap Heatmap: IIFL Finance, HFCL, Welspun Living Shine
Mutual funds were aggressive in picking select small-cap names, showcasing a bottom-up approach.
🔼 Top Small-Cap Additions:
- IIFL Finance: MF stake soared by 36.7%, with investment value surging 48.3% to Rs 460 crore.
- Welspun Living: A 21.5% jump in shareholding brought the total MF holding to Rs 410 crore.
- HFCL: A solid 12.4% increase, taking total fund ownership to Rs 1,250 crore — signaling interest in digital infra and telecom.
- Castrol India: Mutual fund holdings grew 13.5%, highlighting strong dividend yield play.
- International Gemmological Institute: MFs added 10.2%, now holding shares worth Rs 570 crore.
🔽 Top Small-Cap Trims:
- CAMS Services: MF holdings dipped by 10% to Rs 172 crore.
- Aadhar Housing Finance: A 9.3% cut, perhaps reflecting macro concerns in affordable housing finance.
- Others like CDSL, PG Electroplast, and Inventurus Knowledge Solutions also saw trimming.
Key Takeaways for Investors
- Financials Remain Core: MFs continue to bet heavily on banks and NBFCs, reflecting confidence in India’s growth story.
- Selective Stock Picking: The rise in exposure to companies like Jio Financial, Zomato, and IIFL Finance shows that fund managers are betting on digital transformation and consumer growth.
- Mid & Small Caps in Focus: Mutual funds are clearly seeing value and upside potential in carefully selected mid- and small-cap names.
- Caution in Commodities: Sell-offs in metals like Hindalco and JSW Steel reflect cyclical playbook strategies amid global uncertainty.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.