SBI Mutual Fund Trims Top Holding HDFC Bank, Boosts ICICI

SBI Mutual Fund, India's largest asset manager by AUM at ₹12.80 lakh crore as of May 31, disclosed its top 10 equity holdings for the month. The rebalancing showed a clear tilt away from its biggest position.

HDFC Bank remained the top holding but its weight fell to 6.8% from 7.2% in April. The fund sold roughly 94.5 lakh shares, a reduction of 0.4 percentage points. ICICI Bank, the second-largest position, rose to 6.4% from 6.2% after an addition of 1.89 crore shares. That 0.2 point gain was the largest absolute increase among the top 10.

Reliance Industries held steady at third place with a 5.3% weight, down 0.3 points from the prior month even as the fund added 1.1 crore shares. The decline suggests the fund's total equity book grew faster than its RIL position.

The biggest weight drop came from State Bank of India, which fell 0.5 points to 3.5% after a sale of 97.7 lakh shares. SBI was the only bank among the top 10 to see its weight fall by more than a tenth of a percent. Bharti Airtel slipped 0.1 point to 3.4% despite an addition of 35.1 lakh shares. L&T rose 0.1 point to 3.0% on a small share addition.

Kotak Mahindra Bank and Axis Bank each held steady at 2.8% and 2.5% respectively, though the fund added 1.2 crore Kotak shares while selling 47.3 lakh Axis shares. Infosys fell 0.1 point to 2.3% on a sale of 11.7 lakh shares. Bajaj Finance stayed at 1.6% after an addition of 40.2 lakh shares.

Motilal Oswal Financial Services compiled the data from the fund's monthly portfolio disclosure. The report did not offer commentary on the reasoning behind the changes. Fund houses typically rebalance for index tracking, valuation adjustments, or sector rotation.

The shift from HDFC Bank to ICICI Bank aligns with a relative preference visible in the mutual fund industry this year. Several large funds have reduced HDFC Bank exposure amid concerns over margin compression and slower deposit growth, while ICICI Bank has drawn inflows on stronger net interest income trends. AlphaScala's proprietary scoring reflects that divergence: HDFC Bank carries a score of 44 out of 100 (Mixed), while ICICI Bank scores 57 (Moderate).

Infosys, also rated Moderate at 57, saw its weight trimmed despite a stable score. The fund's sale of 11.7 lakh shares may reflect profit-taking after the stock's 12% rally in the five months through May, or a reallocation toward domestic cyclicals.

SBI Mutual Fund will report its June holdings in the coming weeks. Investors tracking fund flows should watch whether the trimming of HDFC Bank and SBI continues, or if the fund reverses course on ICICI Bank after the May addition.