How MFs churned large caps, mid-caps, and small caps in March 2025?

16 Apr 2025 , 09:06 AM

GROSS CHURN BY MUTUAL FUNDS IN MARCH 2025

The month of March 2025 saw domestic equity funds getting lower net inflows of ₹25,082 Crore; -14.4% lower than the ₹29,303 Crore net equity inflows in February 2025. It was sharply lower than the average of the six months prior to that. To get a picture of how mutual fund flows impacted equity buying and selling; we need to look at gross purchases and redemptions in equity funds for March 2025.

Net inflows into equity funds to the tune of ₹25,082 Crore comprised of gross purchases of ₹56,526 Crore and gross redemptions of ₹31,444 Crore. This total volume of ₹87,970 Crore impacts equity buying and selling by mutual funds. Of course, there will also be the equity impact of some flows into hybrid funds and passive funds, but we will leave that for now. We break up this churn into large cap, mid-cap, and small cap stocks for March 2025.

LARGE CAP STOCKS: HOW MFS CHURNED IN MARCH 2025

For the large cap definition, we stick to the AMFI classification of the Top-100 stocks ranked by market cap. These are also reviewed by AMFI twice a year to ensure values are current. Here is the large cap churn in March 2025.

Let us start with the mutual fund large cap buys first! Overall, the mutual funds added 1,362 Lakh shares of Eternal Ltd (Zomato), 685 Lakh shares of Jio Financial Services, 198 Lakh shares of Swiggy Ltd, 126 Lakh shares of Bajaj Housing Finance, 114 Lakh shares of Tata Consumer Products, 88 lakh shares of Adani Green Energy, 64 Lakh shares of Adani Energy Solutions, 64 Lakh shares of Bajaj Finserv Ltd, and 19 Lakh shares of Hindustan Zinc Ltd. In addition, mutual funds also accumulated small portions of ABB India Ltd too. The focus was on consumer services, with digital delivery and financials among preferred sectors.

We now turn to major large cap selling by mutual funds in March 2025. The selling was visible in stocks as part of larger portfolio restructuring. Here are major sell candidates. There was heavy selling of 288 Lakh shares in Bharat Petroleum (BPCL), 179 Lakh shares Kotak Mahindra Bank, 175 lakh shares of Hindalco Industries, 110 Lakh shares of REC Ltd, 53 lakh shares of DLF Ltd, 52 Lakh shares of ICICI Prudential Life Insurance, 16 Lakh shares of IRFC Ltd, 15 lakh shares of LTI Mindtree, and 11 lakh shares of Hindustan Aeronautics (HAL). In addition, mutual funds sold smaller quantities in Rail Vikas Nigam (RVNL). The underlying theme on the sell side appears to be taking profits off the table to leverage the March rally.

MID-CAP STOCKS: HOW MFS CHURNED IN MARCH 2025

If top 100 stocks by market cap are large cap stocks, then 101st to 250th ranked stocks qualify as mid-cap stocks. Here is a look at buying and selling in mid-caps in March 2025.

Let us first focus on mid-cap buying in March 2025. Overall, mutual funds added 5,378 Lakh shares of Vodafone Idea, 1,590 Lakh shares of Yes Bank Ltd, 1,092 Lakh shares of IDFC First Bank, 657 Lakh shares of Vishal Mega Mart, 97 Lakh shares of Marico Ltd, 86 Lakh shares of Central Bank of India, 80 lakh shares of HUDCO Ltd, and 8 Lakh shares each of Hitachi Energy India Ltd. In addition, mutual funds bought smaller quantities of Patanjali Foods and Waaree Energies in March 2025. The buying in mid-caps was a lot more decisive in March 2025.

We now turn to major mid-cap selling candidates during the month of March 2025. Mutual Funds sold 198 Lakh shares of National Aluminium Company (NALCO), 188 Lakh shares of Ola Electric Mobility, 50 Lakh shares of Godrej Industries, 33 Lakh shares of GIC of India, 22 lakh shares of Godrej Properties, 19 lakh shares each of Adani Total Gas, IRCTC, and 360 One WAM. In addition, the month of March 2025 also saw smaller quantities of selling in IREDA and LTTS. The selling in mid-caps was relatively subdued in March 2025, and that could be more because fund action was concentrated on buying into mid cap stories. That is not surprising considering that most mid-caps had corrected sharply from peak prices.

SMALL CAP STOCKS: HOW MFS CHURNED IN MARCH 2025

On market cap ranking, the stocks ranked 251st and lower are classified as small caps by AMFI; although stocks below ₹10,000 crore are generally classified as micro-caps. Here is a gist of the buys and sells by MFs in March 2025.

In March 2025, mutual funds added 341 Lakh shares of Restaurant Brands Asia (RBA), 191 Lakh shares of Reliance Power Ltd, 99 Lakh shares of Sterlite Technologies, 69 lakh shares of TBO Tek Ltd, 39 Lakh shares of IIFL Finance, 26 Lakh shares of Shipping Corporation of India (SCI), and 13 Lakh shares each of Azad Engineering and PTC India Ltd. Mutual funds also purchased smaller quantities of ITD Cementation and Centum Electronics in March 2025.

Let us conclude our churn analysis with the small-cap selling in the month of March 2025. Mutual funds sold 109 Lakh shares of Aavas Financiers, 52 Lakh shares of Kesoram Industries, 40 Lakh shares of Orient Cements, 18 Lakh shares of VST Industries, 16 Lakh shares of Dreamfolks Services, 14 lakh shares of One MobiKwik Systems, and 13 lakh shares of FINO Payments Bank. In addition, March 2025 also saw mutual funds selling smaller quantities in KRN Heat Exchanger, Interarch Building Solutions, and Blue Jet Healthcare.

Broadly, mutual funds have used higher levels to offload large caps, but also accumulated mid-caps with a valuation argument. Unlike previous months, the mutual fund action was driven more by the sudden turn in FPI action in the second half of March 2025.