Mutual funds shape retail investor sentiment and reflect the preferences of institutional investors. The top holdings of these funds often indicate which companies demonstrate robust fundamentals, consistent earnings, and future growth potential. By analyzing these holdings, investors can identify high-conviction bets and align their portfolios with smart institutional money.
Below are the top 10 stocks held by mutual funds in India as of July 2025, along with insights into why fund managers favor them.
1. ICICI Bank
ICICI Bank continues to dominate mutual fund portfolios. Fund managers appreciate its consistent loan growth, strong retail banking performance, and healthy asset quality. Over the past year, the bank expanded its digital banking infrastructure, increased its market share in retail loans, and improved its net interest margins.
Most equity mutual funds, particularly in the large-cap and banking sector categories, have increased their allocation to ICICI Bank. They see it as a cornerstone holding due to its solid capital base, expanding deposit franchise, and well-diversified loan book. With rising consumer credit demand, the bank looks poised to maintain its upward trajectory.
2. HDFC Bank
HDFC Bank holds a long-standing reputation for stability, consistent earnings, and strong governance. Mutual funds allocate significant capital to this private sector lender. The bank leads in digital banking, maintains a granular retail loan book, and sustains one of the lowest non-performing asset (NPA) levels in the sector.
Fund managers expect further momentum in HDFC Bank’s performance due to the recent decline in inflation and potential rate cuts by the Reserve Bank of India. A lower interest rate environment typically boosts lending activity, and HDFC Bank stands ready to capitalize on this macro shift.
3. Reliance Industries
Reliance Industries remains one of the most widely held stocks by mutual funds. Its presence across energy, telecom, retail, and digital services offers diversified revenue streams. Mutual funds particularly favor the company’s ability to pivot into new-age sectors while maintaining leadership in traditional businesses.
Reliance’s telecom arm, Jio, continues to grow its subscriber base and dominate the Indian 5G rollout. In addition, the company’s retail division has expanded aggressively across both urban and semi-urban India. These developments offer strong cross-segment synergies and future earnings visibility, making Reliance a core long-term holding for institutional investors.
4. Axis Bank
Mutual funds have steadily increased their exposure to Axis Bank over the past 12 months. The bank demonstrated robust improvements in its asset quality, reduced slippages, and strengthened its balance sheet. Fund managers appreciate its renewed focus on retail and SME lending, as well as its expanding digital banking footprint.
With credit demand rising and capital adequacy in place, Axis Bank remains well-positioned to scale its operations. Most large-cap mutual funds now count Axis Bank among their top 10 holdings, reinforcing market conviction in its recovery and future growth.
5. Bharat Electronics Limited (BEL)
Bharat Electronics continues to attract mutual fund investments, especially from funds with a thematic or sectoral focus on defense and manufacturing. BEL plays a critical role in India’s defense infrastructure by supplying electronics and weapons systems to the armed forces.
Despite a recent wave of profit-booking in defense stocks, fund managers retained exposure to BEL due to its government contracts, stable cash flows, and consistent order wins. As India pushes for self-reliance in defense production, BEL will likely benefit from increased capital expenditure in this sector.
6. Tata Consultancy Services (TCS)
TCS continues to command institutional trust across mutual funds. Fund managers value its leadership in IT services, global footprint, and strong deal pipelines. With consistent operating margins and a robust order book, TCS offers stability in times of market volatility.
During periods of macroeconomic uncertainty, many fund managers increase allocations to TCS due to its defensive nature and predictable cash flows. Additionally, its focus on digital transformation services aligns with long-term global trends, reinforcing its appeal among large-cap mutual funds.
7. Kotak Mahindra Bank
Kotak Mahindra Bank remains a popular choice among fund managers for its conservative lending practices, strong capital ratios, and efficient cost structure. Unlike other private banks that aggressively chase growth, Kotak adopts a risk-aware strategy, which helps it maintain asset quality and profitability.
Mutual funds continue to allocate funds to Kotak due to its balanced retail-corporate loan mix and strategic investments in technology. Kotak’s scalable digital platforms also provide a growth engine for future earnings, making it a reliable bank stock in any equity fund’s portfolio.
8. Maruti Suzuki
India’s largest automobile manufacturer, Maruti Suzuki, maintains a dominant market share in the passenger vehicle segment. Mutual funds maintain substantial holdings in the company due to its leadership in small and mid-sized cars, broad dealership network, and recovery in rural demand.
Fund managers anticipate a revival in auto sales as interest rates drop and consumer confidence improves. Maruti’s continued focus on launching hybrid and electric models enhances its long-term prospects in a changing automotive landscape.
9. Asian Paints
Asian Paints stands out as a blue-chip consumer stock favored by mutual funds. Its unmatched distribution network, premium branding, and pricing power help it maintain leadership in the paints and coatings segment.
Fund managers consider Asian Paints a safe long-term investment. Its consistent revenue growth, superior return ratios, and expansion into adjacent categories such as home décor and waterproofing add to its investment appeal. During economic slowdowns, funds often rotate into defensives like Asian Paints to preserve portfolio stability.
10. IDFC First Bank
IDFC First Bank represents a rising star in mutual fund portfolios. It gained traction following a strategic transformation from a wholesale-focused bank to a retail-heavy model. The bank increased its CASA ratio, improved profitability, and attracted institutional interest after Warburg Pincus acquired a significant stake.
Mutual funds recognize the turnaround in IDFC First Bank’s business model and management strategy. Its focus on secured retail lending, digital expansion, and cost optimization initiatives signal sustainable growth, which appeals to value-focused fund managers.
🧠 Why Fund Managers Prefer These Stocks
Mutual funds select these stocks based on several consistent factors:
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Consistent earnings growth: These companies deliver stable profits quarter after quarter.
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Strong balance sheets: Each company maintains low leverage and high liquidity.
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Sector leadership: These businesses operate at the top of their industries.
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Economic resilience: Many of these companies withstand macroeconomic shocks better than peers.
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Scalability: Fund managers seek companies with potential to expand across markets and geographies.
🧭 Recent Mutual Fund Portfolio Trends (2025)
In the past quarter, mutual funds shifted slightly toward large-cap and diversified plays. They trimmed exposure to overvalued defense stocks but retained core positions in companies like BEL. Fund managers also allocated fresh capital to mid-cap banks and rising private lenders like IDFC First.
Aggressive hybrid funds deployed more capital toward equity holdings in companies like Axis Bank, HDFC Bank, and Asian Paints. Meanwhile, passive index funds like those launched by Jio-BlackRock funneled institutional flows into Nifty Midcap 150, Smallcap 250, and Next 50 components. These developments reflect fund managers’ effort to diversify portfolios while staying aligned with macro themes.
📌 Conclusion
Mutual funds hold these top 10 stocks for clear, compelling reasons: earnings consistency, sector leadership, and macroeconomic resilience. By tracking where fund managers allocate capital, retail investors can learn how to build portfolios that align with long-term growth trends.
ICICI Bank, HDFC Bank, Reliance, and TCS offer the core of most portfolios. At the same time, newer additions like IDFC First Bank and BEL represent focused bets on emerging sectors. Together, these stocks give mutual funds the stability, growth, and strategic exposure required to deliver superior returns over time.
Investors should monitor mutual fund holdings regularly and use that insight to rebalance their own strategies accordingly. These top holdings provide a blueprint for building a high-quality, diversified, and forward-looking investment portfolio.
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