SBI Tops Mutual Fund Buys in July with Record ₹10,200 Crore Investment

India’s mutual fund industry witnessed a historic surge in equity allocations during July 2025, with State Bank of India (SBI) emerging as the single largest investment target. Mutual funds collectively poured ₹10,200 crore into SBI’s qualified institutional placement (QIP), making it the most significant deployment of capital into a single stock for the month. The move reflects strong institutional confidence in India’s largest lender amid robust liquidity and strategic sectoral rotation.

 

Key Highlights

Mutual funds invested ₹10,200 crore in SBI shares via its ₹25,000 crore QIP.

 

SBI Mutual Fund and HDFC Mutual Fund led the charge with ₹2,322 crore and ₹1,500 crore allocations respectively.

 

Quant Mutual Fund and Nippon India Mutual Fund each invested nearly ₹1,200 crore.

 

The QIP attracted bids nearly four times the shares on offer, including participation from LIC and foreign portfolio investors.

 

Record-Breaking Month for Equity Inflows

July marked a milestone for India’s mutual fund industry:

 

Net inflows into equity schemes reached ₹42,702 crore, the highest ever, surpassing the previous peak of ₹41,156 crore in December 2024.

 

The surge was driven by strong retail participation, robust SIP flows, and renewed interest in large-cap financials and beaten-down IT stocks.

 

Despite aggressive equity deployment, cash holdings in equity mutual funds ticked up slightly from ₹1.82 lakh crore in June to ₹1.85 lakh crore in July.

 

This uptick in cash levels reflects not restrained deployment but record inflows, prompting fund managers to maintain higher liquidity buffers.

 

Sectoral Trends: Financials and IT Dominate

Banking and Financials

 

Apart from SBI, mutual funds invested over ₹2,000 crore in HDB Financial Services, Axis Bank, Kotak Mahindra Bank, and ICICI Bank.

 

The financials sector continues to attract institutional flows due to improving asset quality, credit growth, and regulatory clarity.

 

Information Technology

 

Infosys and TCS together saw fresh MF inflows of ₹9,400 crore despite the Nifty IT index falling 9% in July.

 

HCL Technologies also ranked among the top 10 most-bought counters.

 

These contrarian bets reflect long-term optimism despite short-term headwinds like muted earnings, US tariff concerns, and layoffs.

 

Selective Selling and Portfolio Rebalancing

While fund managers aggressively bought into financials and IT, they also trimmed exposure to certain counters:

 

Interglobe Aviation and Eternal saw the largest net MF selling at ₹2,400 crore and ₹1,700 crore respectively.

 

Other exits included HPCL, Hindalco Industries, HDFC AMC, ACC, and HDFC Bank.

 

This rebalancing suggests a shift toward high-conviction bets and away from cyclical or overvalued segments.

 

Strategic Implications for Investors

SBI’s record QIP participation by mutual funds signals strong institutional endorsement of its growth strategy and capital adequacy.

 

Retail investors may view this as a cue to revisit large-cap financials, especially those with improving fundamentals and government backing.

 

The surge in equity inflows and SIP momentum indicates sustained investor confidence in India’s long-term growth story.

 

Outlook

With liquidity remaining strong and macro indicators stable, mutual funds are expected to continue deploying capital into high-quality stocks. Financials, IT, and select consumption plays may remain in focus. However, fund managers are likely to maintain elevated cash buffers to navigate volatility and seize tactical opportunities.

 

Sources: Business Today, Wealthy Brains