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

13 Mar 2025 , 11:49 AM

GROSS CHURN BY MUTUAL FUNDS IN FEBRUARY 2025

The month of February 2025 saw domestic equity funds getting sharply lower net inflows of ₹29,303 Crore; -26.2% lower than the ₹39,688 Crore net equity inflows in January 2025. 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 February 2025. The net inflows into equity funds to the tune of ₹29,303 Crore were comprised of gross purchases of ₹54,429 Crore and gross redemptions of ₹25,126 Crore. It is this total volume of ₹79,555 Crore that impacts the equity buying and selling by mutual funds. We break up this churn into large cap, mid-cap, and small cap stocks for February 2025.

LARGE CAP STOCKS: HOW MFS CHURNED IN FEBRUARY 2025

Let us begin with our definition of large caps; which adheres to the AMFI definition. The top-100 stocks ranked by market cap are large cap stocks; which is reviewed by AMFI twice a year to ensure that definitions are current. Here is the large cap churn in February 2025.

Let us start with the mutual fund large cap buys first! Overall, the mutual funds added 766 Lakh shares of Samvardhana  Motherson International, 366 Lakh shares of Varun Beverages, 99 Lakh shares of Dr Reddy’s Laboratories, 79 Lakh shares of Swiggy Ltd, 31 Lakh shares of Adani Green Energy, 27 lakh shares of Havells India, 24 Lakh shares of Ultratech Cements, 19 Lakh shares of Adani Energy Solutions, and 11 Lakh shares of Siemens Ltd. In addition, mutual funds also accumulated small portions of ABB India Ltd too. Broadly, there are some big bets being made on the beaten down stocks like Varun Beverages and Swiggy Ltd.

We now turn to major large cap selling by mutual funds in February 2025. The selling was visible in stocks as part of larger portfolio restructuring as investors tried to move out of financials. Here are major sell candidates. There was heavy selling of 415 Lakh shares in Punjab National Bank (PNB), 236 Lakh shares Indian Oil Corp (IOCL), 119 lakh shares of Shriram Finance, 66 Lakh shares of ICICI Prudential Life Insurance, 54 lakh shares of Cholamandalam Investments and Finance, 30 Lakh shares of Interglobe Aviation (Indigo Airways), 27 Lakh shares of Hyundai Motor India, 24 lakh shares of Bajaj Housing Finance, and 14 lakh shares of Macrotech Developers (Lodha). In addition, mutual funds sold smaller quantities in Info Edge (Naukri). The underlying theme on the sell side appears to be taking profits off the table in banking and NBFC stocks.

MID-CAP STOCKS: HOW MFS CHURNED IN FEBRUARY 2025

How do we classify mid-caps? If top 100 stocks by market cap are classified as large cap stocks, then 101st to 250th ranked stocks qualify as mid-cap stocks. Here is a quick look at buys and sells of mid-cap stocks by mutual funds in Jan-25.

Let us first focus on mid-cap buying in February 2025. Overall, mutual funds added 879 Lakh shares of Yes Bank, 734 Lakh shares of IDFC First Bank, 158 Lakh shares of AU Small Finance Bank, 120 Lakh shares of Max Healthcare, 83 Lakh shares of Prestige Estates, 32 Lakh shares of Glenmark Pharma, 22 lakh shares of Apollo Hospitals, and 18 Lakh shares each of Dalmia Bharat & KEI Industries. In addition, the mutual funds also bought smaller quantities of Colgate Palmolive India in February 2025. The buying was most prominent in beaten down financial and healthcare stocks in the month.

We now turn to major mid-cap selling candidates during the month of February 2025. Mutual Funds sold 208 Lakh shares of Ola Electric Mobility, 163 Lakh shares of IndusInd Bank, 106 Lakh shares of HUDCO, 52 Lakh shares of Exide Industries, 48 lakh shares of Voltas Ltd, 27 lakh shares of Coromandel International, and 26 Lakh shares of JSW Infrastructure Ltd. In addition, the month of February 2025 also saw smaller quantities of selling in Godrej Industries, Tata Technologies, and Mazagon Dock Shipbuilders. The selling in mid-caps was relatively subdued in February 2025, and that could be more because fund action was concentrated on large cap stories. However, mid-caps saw a lot of price depletion in 2025.

SMALL CAP STOCKS: HOW MFS CHURNED IN FEBRUARY 2025

We now turn to small cap stocks. 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 Feb-25.

In February 2025, mutual funds added 31 Lakh shares of Welspun Enterprises, 31 Lakh shares of Happiest Minds Technologies, 23 lakh shares of ITD Cementation, 20 Lakh shares of Deepak Fertilizers, and 17 Lakh shares of Teamlease Services. In addition, mutual funds also purchased smaller quantities of Hindustan Foods, Signature Global, Godfrey Philips, VA Tech Wabag, and Force Motors in the small cap space in February 2025.

Let us conclude our churn analysis with the small-cap selling in the month of February 2025. Mutual funds sold 131 Lakh shares of Manappuram Finance, 41 Lakh shares of Can Fin Homes, 36 Lakh shares of India Cements, 15 Lakh shares of Strides Pharma Science, 14 Lakh shares of Aarti Pharmalabs, 1126 lakh shares of Dilip Buildcon, 9 lakh shares of FINO Payments Bank. In addition, February 2025 also saw mutual funds selling smaller quantities in Senores Pharmaceuticals, Blue Jet Healthcare, and Sarda Energy & Minerals.

Broadly, mutual funds have been relatively cautious on the market due to the massive FPI sell-off. Unlike previous months, the mutual fund action was largely focused on the financials; both on the buy side and on the sell-side, although small cap action was tilted a more sector agnostic approach.