Mutual Funds Drive June Rally with ₹39,000 Cr in Equities, Block Deals

Mutual funds (MFs) in India demonstrated heightened investment activity in June 2025, injecting over ₹39,000 crore into equities amid market volatility. This aggressive deployment nearly matched the month’s total block deal value of ₹41,000 crore, according to ACE Equities, and signalled a robust domestic investor appetite despite global economic uncertainties and subdued foreign flows.

Block Deals Dominate Mutual Fund Activity

Several large block transactions attracted heavy mutual fund participation. The most notable was Reliance Industries’ ₹11,000 crore stake sale in Asian Paints, where MFs picked up shares worth ₹10,454 crore. SBI Mutual Fund led this transaction with an ₹8,165 crore investment, followed by ICICI Prudential MF at ₹1,860 crore.

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Vishal Mega Mart also saw strong MF involvement. Samayat Services offloaded a ₹10,500 crore stake, with MFs investing ₹8,200 crore. Among them, SBI MF put in ₹2,530 crore, HDFC MF ₹2,170 crore, and Kotak Mahindra MF ₹1,410 crore.

Another major transaction was in Bajaj Finserv, where promoters offloaded a 1.94% stake worth ₹5,828 crore. Mutual funds picked up ₹4,860 crore in shares, led by ICICI Prudential MF (₹1,660 crore) and SBI MF (₹1,520 crore), with contributions also coming from HDFC, UTI, and Aditya Birla MFs.

In Sai Life Sciences, TPG’s exit via a ₹1,500 crore deal resulted in mutual fund investments exceeding ₹1,100 crore, led by Nippon India MF at ₹440 crore. Premier Energies also attracted ₹1,000 crore out of a ₹1,600 crore block deal.

Other notable beneficiaries included Yes Bank, Jyoti CNC Automation, Suzlon Energy, and Niva Bupa Health, each drawing ₹370–₹390 crore from mutual funds.

Strong Anchor Investments in IPOs

Mutual funds were active participants in IPO anchor tranches, reflecting continued interest in primary markets. Key placements included:

• HDB Financial Services: ₹1,400 crore out of ₹12,500 crore issue
• Ellenbarrie Industrial Gases: ₹428 crore from MFs
• Kalpataru Projects: ₹377 crore from MFs in a ₹1,590 crore issue
• Oswal Pumps: ₹432 crore in a ₹1,388 crore IPO
• Sambhv Steel Tubes: ₹55 crore in a ₹540 crore offering

Eight IPOs collectively raised ₹17,690 crore during the month, with MFs contributing over ₹2,700 crore in anchor investments alone.

Cash Holdings See Sharp Decline

This aggressive capital deployment was reflected in reduced cash levels across major mutual fund houses:

• SBI MF: from 8.6% to 8.1%
• ICICI Prudential MF: from 6.9% to 6.1%
• HDFC MF: from 7.6% to 7.2%
• Nippon India MF: from 2.8% to 2.6%
• PPFAS MF: from 21.6% to 19.6%
• Motilal Oswal MF: from 16.4% to 10.1%
• Quant MF: from 10.4% to 7.2%

Conclusion

There was a significant change in domestic mutual fund activity in June 2025 as institutions began investing in stocks through initial public offerings (IPOs) and big block agreements. 

This pattern indicates a strategy change from cash preservation to active market activity, despite global challenges, and it also highlights the increased confidence among fund managers.