SBI Mutual Fund, India’s largest by equity AUM, saw the biggest cut in absolute terms, reducing cash by Rs 250 crore to Rs 1,007 crore. Its cash allocation dropped to 8.1 percent from 8.6 percent.
India’s top mutual funds reduced their cash holdings in June 2025 amid a rebound in equity inflows and rising market levels, signalling growing confidence and active deployment into stocks, according to Motilal Oswal’s latest Fund Folio. Cash as a share of total equity assets fell to 5.8 percent from 6.8 percent the previous month. The shift came amidst increased net equity inflows of Rs 24,600 crore in June, up from Rs 20,100 crore in May, while systematic investment plan (SIP) contributions hit a record Rs 27,270 crore.
SBI Mutual Fund, India’s largest by equity AUM, saw the biggest cut in absolute terms, reducing cash by Rs 250 crore to Rs 1,007 crore. Its cash allocation dropped to 8.1 percent from 8.6 percent. HDFC Mutual Fund trimmed Rs 110 crore, bringing its cash level to Rs 972 crore (7.2 percent). Axis Mutual Fund and Nippon India Mutual Fund also pared down cash by Rs 38 crore and Rs 91 crore, respectively.
On the other hand, Motilal Oswal Mutual Fund added Rs 49 crore, bringing its total cash to Rs 468 crore. However, its cash as a percentage of equity assets fell from 16.4 percent to 10.1 percent due to a rise in AUM. PPFAS Mutual Fund, known for its value approach, increased cash holdings to Rs 298 crore, the highest in percentage terms at 19.6 percent, though lower than 21.6 percent in June.
Other reductions included Rs 78 crore by UTI Mutual Fund, Rs 44 crore by Mirae Asset, and Rs 26 crore by DSP Mutual Fund. Invesco Mutual Fund raised its cash by Rs 23 crore, while Bandhan Mutual Fund and Sundaram Mutual Fund also saw reductions.
The report notes that thus cash reduction came alongside a 3.1 percent rise in the Nifty, which ended June at 25,517, and a 4.3 percent month-on-month increase in mutual fund equity AUMs to Rs 36.6 lakh crore. Fund managers increased allocation to sectors like NBFCs, retail, consumer durables, and telecom, while exposure to private banks, automobiles, technology, and utilities were lower.
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