Lowest Mutual Fund Equity Deployment Since July 2023 Recorded in March 2025

The mutual fund industry’s net investment into the Indian equity market fell sharply to ₹13,458.85 crore in March 2025, according to the latest data released by the Securities and Exchange Board of India (SEBI). This marked the lowest level of monthly deployment since July 2023, when the figure stood at ₹7,707 crore.

This drop follows two months of substantial inflows—₹48,000 crore in February and ₹57,700 crore in January—making March’s investment a notable deceleration.

Peak Investments Seen in October 2024

The highest mutual fund deployment into equities in recent times was recorded in October 2024, reaching ₹90,770 crore. This surge in investment was fuelled by a rally in the Indian stock market towards the end of September, when benchmark indices touched fresh all-time highs.

Since July 2023, monthly investments by mutual funds had consistently remained above ₹15,000 crore until the dip witnessed in March 2025.

Market Correction and Global Headwinds Behind the Decline

The dip in equity investment comes amid a broader market correction. Indian equity indices experienced a decline of nearly 15% from their September 2024 highs, before showing signs of recovery in March. This correction, driven by a confluence of global and domestic factors, may have led mutual funds to adopt a more cautious approach.

Geopolitical developments and external pressures, such as policy changes in major economies, also contributed to a decline in investor sentiment. One of the notable recent triggers was US President Donald Trump’s imposition of fresh tariffs, which rattled global markets and exerted downward pressure on Indian equities.

April 2025 Trends Indicate Continued Caution

As of the initial days of April 2025, mutual funds have deployed just ₹5,428 crore into equities. While it’s too early to predict the month’s final tally, the slow pace of investment indicates that market participants remain wary.

Despite the slight recovery observed in March, the caution exercised by mutual funds suggests that uncertainty still lingers in the market, potentially influenced by macroeconomic signals, global cues, and upcoming domestic events.

Conclusion

The significant reduction in mutual fund investment into the Indian equity market in March 2025—its lowest point in eight months—reflects a cautious sentiment among fund managers amid volatile market conditions. While inflows surged to record levels in previous months, current deployment patterns highlight the impact of both global uncertainty and domestic market correction on institutional investment strategies.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.