ICICI Bank Emerges as Mutual Funds' Single Biggest Bet of the Month
Indian domestic mutual funds carried out a sweeping portfolio overhaul during May. According to a report by brokerage firm Yes Securities, fund houses collectively pulled capital from export-oriented sectors and channelled it into banking, domestic consumption, and industrial stocks instead.
ICICI Bank stood out as the biggest beneficiary of this rotation, with fund houses deploying ₹4,427 crore into the lender over the month. HDFC Bank and Kotak Mahindra Bank also attracted heavy buying interest. The appetite for financial names extended to fintech platform Groww and state-owned insurer LIC, both of which drew sizeable inflows. On the energy and conglomerate side, Reliance Industries (RIL), Adani Enterprises, JSW Energy, and Gujarat State Petronet all received meaningful allocations. Lenskart rounded out the notable additions, with fund houses making a significant bet on the optical retail brand as well.
Infosys, Wipro, Vedanta Among the Heavyweights That Got Sold
The buying in banking and domestic-facing stocks came hand in hand with aggressive selling elsewhere. Fund managers trimmed their holdings in IT majors Infosys and Wipro, reducing their stakes in two of India's largest software exporters by a considerable margin.
The selling pressure was equally pronounced across commodity and infrastructure stocks. Vedanta, Hindalco, and Larsen and Toubro all witnessed large-scale outflows from mutual funds during May. Public sector names were not spared either, with Bharat Electronics (BEL) and NTPC both losing mutual fund support. Pharma stock Lupin and commodity exchange MCX also featured among the positions that fund houses chose to exit and book profits from.
SMID Weightage at Historic Highs Points to a Broad-Based Rally
Beyond the month's buying and selling activity, the Yes Securities report flags an encouraging structural trend in Indian equity markets. The weightage of midcap and smallcap (SMID) stocks within the Nifty-500 index has climbed to a historically high level. Analysts note that when market breadth expands in this manner and smaller stocks begin outperforming their largecap peers, it tends to lay the groundwork for a sustained and wide-ranging rally rather than a narrow advance concentrated in a few index names.
The liquidity picture adds further confidence. The combined cash turnover on NSE and BSE has once again edged near its all-time high, underscoring the depth of current market participation. Adding to the bullish signals, both foreign institutional investors (FII) and domestic institutional investors (DII) are currently active buyers in the small and midcap space, suggesting that conviction in this segment is building across investor categories simultaneously.
