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

19 May 2025 , 11:10 AM

WHAT WE READ FROM THE MF MONTHLY PORTFOLIO SHIFTS

At a macro level, what are the stocks that mutual funds in India preferred in April 2025 and which are the stock where mutual funds cut exposure? There were some macro trends visible. For instance, mutual funds did buy into the BFSI and the metals & mining space. While the former was a play on the India story, the latter is a play on China demand and a bet on industrial recovery in India. However, mutual funds also turned sceptical on certain sectors. IT is a space where MFs cut positions on concerns over IT spending. However, some buying interest was seen in big IT names like TCS, Infosys, and HCL Tech. The other sector where MFs cut positions was oil & gas, largely on account of the expected fall in oil prices as Saudi Arabia floods the oil market with supplies. Let us now turn to the churn story overall.

LARGE CAP STOCKS: HOW MFS CHURNED IN APRIL 2025

Large caps have been defined as per the AMFI classification of the Top-100 stocks ranked by market cap. This classification is reviewed and updated by AMFI twice a year to ensure values are current. Here is the large cap churn in April 2025.

Let us start with the mutual fund large cap buying first! Overall, mutual funds added 505 Lakh shares of Punjab National Bank (PNB), 464 Lakh shares of Kotak Mahindra Bank, 158 Lakh shares of Vedanta, 149 Lakh shares of HDFC Life Insurance, and 43 Lakh shares of Marico Ltd. The buying interest was clearly biased towards large cap BFSI.

We now turn to major large cap selling by mutual funds in April 2025. There was heavy selling of 2,661 Lakh shares in Jio Financial Services, 406 Lakh shares of Nestle Ltd, 361 lakh shares of Divi’s Laboratories, 233 Lakh shares of SRF Ltd, and 173 lakh shares of LTI Mindtree. The selling was sectorally spread, and was largely in stocks with a strong rally.

MID-CAP STOCKS: HOW MFS CHURNED IN APRIL 2025

If the top 100 stocks by market cap are classified as large cap stocks, then the stocks ranked 101st to 250th on market capitalization qualify as mid-cap stocks. These mid-caps are generally more of alpha plays on focused business models in India. Here is a look at buying and selling in mid-caps in April 2025.

Let us first focus on mid-cap buying in April 2025. Overall, mutual funds added 24,314 Lakh shares of Vodafone Idea, 51 Lakh shares of IRCTC Ltd, 45 Lakh shares of JSW Energy, 20 Lakh shares of Tata Technologies, and 4 Lakh shares of Mazagon Dock Shipbuilders. While Vodafone looks an opportunistic bet, Tata Tech and Mazagon are more of correction buys.

We now turn to major mid-cap selling during the month of April 2025. Mutual Funds sold 634 Lakh shares of Indraprastha Gas Ltd (IGL), 478 Lakh shares of JSW Infra, 116 Lakh shares of IREDA Ltd, 9 Lakh shares of Tata Elxsi, and 3 lakh shares of Patanjali Foods. The selling seems to be directed more at stocks that have moved out of favour in recent months.

SMALL CAP STOCKS: HOW MFS CHURNED IN APRIL 2025

Where mid-cap ends, small caps begin. The stocks ranked 251st and lower are classified as small caps by AMFI; although generally the stocks that trade below ₹10,000 crore of market cap are classified as micro-caps. This segment is normally pure bottom-up alpha plays, but also vulnerable to macros. Here is a gist of churning by MFs in April 2025.

In April 2025, mutual funds added 407 Lakh shares of Sterlite Technologies, 87 Lakh shares of IRCON International, 43 Lakh shares of Nirlon Ltd, 37 lakh shares of Shilpa Medicare, and  22 Lakh shares of PSP Projects. Most of the buying was driven by pure bottom-up factors.

What about small-cap selling in April 2025? Mutual funds sold 228 Lakh shares of NMDC Steel, 100 Lakh shares of Marksans Pharma, 16 Lakh shares of Shaily Engineering Plastics, 6 Lakh shares of Route Mobile, and 3 Lakh shares of Action Construction Equipment (ACE).

While large cap buying in April 2025 was largely focused on BFSI and metals, the mid-cap and small cap action is more bottom up. It shows institutional investor confidence returning.