Mutual funds poured ₹17,500 crore into ICICI and HDFC Bank in May, leading a broad financials theme. AlphaScala's scorecards flag the risk behind the buying.
India's mutual funds loaded up on ICICI Bank and HDFC Bank in May, pouring a combined ₹17,530 crore into the two private-sector lenders. The data, released by the Association of Mutual Funds in India, shows financials dominated inflows across market-cap segments, with digital platforms and energy companies also drawing heavy institutional flows.
ICICI Bank alone attracted nearly ₹10,000 crore, the largest single-stock inflow across all categories. HDFC Bank added ₹7,530 crore. Reliance Industries drew more than ₹7,000 crore. Together, the top three accounted for ₹24,500 crore of buying – roughly the entire monthly flow into many mid-cap schemes, fund managers said.
The concentration in private banks is not a one-month anomaly. ICICI Bank has been a consistent large-cap favourite for several quarters. HDFC Bank's flows picked up after its merger costs subsided and loan growth stabilised. The May data suggests fund managers see these lenders as best positioned to win market share from weaker state-owned peers, several analysts said. AlphaScala's scoring system rates ICICI Bank at 57 out of 100 (Moderate) and HDFC Bank at 40 (Mixed), reflecting the risk-reward trade-off embedded in these positions.
Mid-cap inflows leaned into consumer internet and fintech. Lenskart Solutions topped the segment at ₹3,549 crore. Billionbrains Garage Ventures, the parent company of investment platform Groww, came next at ₹2,937 crore. PB Fintech rounded out the top three internet names. Together, the three companies drew ₹7,200 crore. These are high-growth, high-valuation businesses – not typical mutual fund staples. The flows suggest fund managers are willing to pay up for user moats and platform economics, according to market participants.
Energy-related stocks also saw heavy buying. Gujarat Gas was the most-bought small-cap at ₹3,997 crore, and Indraprastha Gas added ₹727 crore. The two city-gas distribution companies together attracted ₹4,724 crore, representing the bulk of small-cap buying. Reliance Industries, JSW Energy, and the gas utilities collectively drew more than ₹14,000 crore in May, the data show.
For an investor tracking fund flows, the May data highlights where institutional conviction was strongest. The June quarter results for banks and gas utilities are due in July, which will provide the first check on these positions.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.