Top Large cap, Mid cap & Small Cap Stocks most Mutual Funds bought in March 2026
Institutional activity often gives early signals about sector rotation, conviction levels, and evolving market narratives. Data from ET Money highlights where mutual funds increased and reduced their stakes in March.
Let’s break this down into actionable insights.
🔻 Stocks Where Mutual Funds Reduced Stake
Large Cap Cuts
- Hindustan Zinc: -28%
- Canara Bank: -21%
- Bharat Petroleum Corporation Limited: -15%
👉 Interpretation:
Profit booking in cyclicals (metals, PSU banks, oil) after strong rallies. Likely valuation-driven rather than structural bearishness.
Mid Cap Reductions
- UCO Bank: -67%
- IDBI Bank: -35%
- Godrej Properties: -16%
👉 Interpretation:
- PSU banks continue to see rotation out after sharp rerating
- Real estate seeing selective trimming, not broad exit
Petronet LNG saw massive ₹600 crore outflows in March by mutual funds. It was followed by KIE Industries and Coforge, where fund houses sold stocks worth ₹500 crore and ₹300 crore, respectively.
Small Cap Sell-Offs (Aggressive)
- The Sandur Manganese & Iron Ores Ltd: -75%
- India Glycols Limited: -74%
- Banco Products: -73%
👉 Interpretation:
Classic de-risking in overheated small caps. Likely driven by:
- Valuation excess
- Liquidity concerns
- Risk management ahead of volatility
Shaily Engineering, Home First Finance and TeamLease saw the most selling of up to ₹100 crore.
🔺 Stocks Where Mutual Funds Increased Stake
Large Cap Buying
- Mazagon Dock Shipbuilders Limited: +60%
- Indian Railway Finance Corporation: +54%
- DLF Limited: +24%
- Top Stocks Bought by Mutual Funds (March 2026) are HDFC Bank (high conviction across major houses), Tata Motors, BSE.
- Large-cap stocks
- According to data from Nuvama Research, HDFC Bank, ICICI Bank and State Bank of India (SBI) were among the top stock picks of funds as they witnessed inflows worth ₹15,800 crore, ₹6,800 crore and ₹4,800 crore, respectively.
👉 Interpretation:
- Continued defence + railway theme conviction
- Selective real estate accumulation
Mid Cap Accumulation
- Bajaj Housing Finance: +111%
- Anthem Biosciences: +59%
- Waaree Energies: +30%
- Top Mid/Small Cap Stocks Bought by Mutual Funds (March 2026) are Adani Enterprises (₹2,888.2 Cr), Adani Green Energy (₹3,193.3 Cr), and NTPC Green Energy (added over 1 crore shares).
- In the mid-cap segment, Anthem Biosciences was the most-preferred bet as it saw buying worth ₹1100 crore in March.
- Another recently-listed player, Urban Company, also emerged as a top buy, with ₹900 crore in inflows, followed by Central Mine Planning at ₹700 crore.
👉 Interpretation:
- Strong tilt toward structural growth themes:
- Housing finance
- Pharma outsourcing (CRDMO)
- Renewable energy
Small Cap High-Conviction Bets
- Swan Defence and Heavy Industries: +4942%
- Chennai Petroleum Corporation Limited: +1087%
- Tamilnad Mercantile Bank: +309%
- Sedemac Mecha, with inflows worth ₹900 crore, Omnitech Engg ( ₹200 crore) and Ujjivan Small Fin Bank ( ₹200 crore), were the top small-cap stocks that mutual funds bought the most in March.
👉 Interpretation:
- These are low base effects + fresh entries
- Indicates new positions rather than incremental buying
- Signals emerging conviction in niche ideas
🧠 Key Takeaways for Investors
1. Rotation, Not Exit
Mutual funds are not exiting equities—they’re rotating from overheated pockets to structural growth themes.
2. PSU Trade Cooling Off
- Selling in PSU banks (UCO, IDBI)
- Buying continues in select PSU themes (railways, defence)
👉 Conclusion: More selectivity within PSU basket
3. Structural Themes Gaining Strength
Strong accumulation in:
- Defence
- Railways
- Housing finance
- Renewable energy
- Pharma outsourcing
👉 These remain multi-year compounding stories
Key Trends & Data Sectoral Focus:
Continued heavy buying in energy, banking, and infrastructure-related stocks, with notable inflows into energy funds like Tata Steel and ONGC.
Best-Selling Schemes:
HDFC Mid Cap Fund recorded the highest inflows (₹1,475.70 crore), followed by Nippon India Growth Mid Cap Fund and Edelweiss Mid Cap Fund.
📌 Final Thought
Mutual fund activity is not about short-term signals—it reflects portfolio positioning for the next cycle.
As an investor, the edge lies in:
- Tracking where smart money is increasing conviction
- Avoiding crowded trades where institutions are exiting