62% of equity funds deploy more capital in June; total cash with MFs stands at Rs 1.5 lakh crore

PPFAS and Axis Mutual Fund trimmed over Rs 1,500 crore and Rs 2,300 crore, respectively

Equity mutual funds ramped up deployment into stocks in June 2025, trimming cash holdings by nearly Rs 15,000 crore month-on-month, according to Prime MF Database. Average cash-to-AUM ratios dropped to a 12-month low of 3.09 percent, down from 3.56 percent in May.

About 62 percent of active equity mutual funds reduced cash levels—up from 60 percent in May—signaling increased confidence in the market. The total cash parked across schemes stood at Rs 1.5 lakh crore at the end of June, compared to Rs 1.65 lakh crore a month ago.

Biggest Movers

Motilal Oswal Mutual Fund led the pack, slashing cash by over Rs 6,500 crore and halving its cash-to-AUM ratio.

PPFAS and Axis Mutual Fund also trimmed over Rs 1,500 crore and Rs 2,300 crore, respectively.

Among large AMCs, Kotak Mahindra, Franklin Templeton, Sundaram, and HDFC MF all cut cash levels, while ICICI Prudential added Rs 1,786 crore—though its ratio inched up only slightly.

Quantum Mutual Fund retained the highest cash ratio (12.51 percent) despite a marginal decline. CIO Chirag Mehta attributed this to “lack of opportunities at comfortable valuations,” reiterating that cash remains a residual outcome of their process.

Kotak AMC’s Shibani Kurian added that their cash levels—typically between 2–5 percent—are not driven by strategic calls but by deployment cycles.

A few AMCs bucked the trend. SBI MF added Rs 1,092 crore in cash, while PGIM India nearly doubled its cash pile to Rs 1,110 crore, raising its ratio to 5 percent. Baroda BNP Paribas, WhiteOak Capital, and Mirae Asset MF also upped their cash levels. Again, this is not necessarily an indication of a bearish stance.

Where the Money Went

Across the board, mutual funds added 695 new stocks to their portfolios—a clear uptick in participation. Of these, 558 were small-cap names, absorbing Rs 21,730 crore in net inflows.

Mid caps attracted Rs 35,116 crore in net buying, focused on quality growth names like Vishal Mega Mart, Max Healthcare, and Dixon Technologies.

Large caps—despite accounting for only 8 percent of new additions—saw the highest allocation at Rs 40,775 crore, underlining a risk-calibrated shift in fresh flows.