ICICI Bank and Eternal Among Top 5 Largecap Stocks Sold by Mutual Funds in August: Check Details

Mutual Funds Cut Exposure to Several Largecap Stocks in August

Mutual funds reduced their exposure to several largecap companies in August 2026 as fund managers continued to rebalance portfolios across sectors.

According to the Indian Mutual Fund Industry Overview report by Dolat Capital, largecaps accounted for most of the mutual fund outflows from sectors such as IT, banks, oil and gas, power and construction. Five largecap stocks recorded particularly high net selling during the month.

The five stocks were ICICI Bank, Infosys, Eternal, Tech Mahindra and Power Finance Corporation (PFC).

ICICI Bank saw the highest net selling value at Rs 4,040 crore.

Top 5 Largecap Stocks Sold by Mutual Funds

StockSectorMutual Fund Net Selling in AugustICICI BankBankingRs 4,040 croreInfosysITRs 2,911 croreEternalConsumer technology/InternetRs 2,389 croreTech MahindraITRs 1,843 crorePower Finance CorporationFinanceRs 1,576 crore

Source: Dolat Capital's Indian Mutual Fund Industry Overview, as reported by Economic Times.

The figures represent the net value of mutual fund selling during August, rather than the total value of all transactions undertaken in the stocks.

ICICI Bank Sees Rs 4,040 Crore Mutual Fund Selling

ICICI Bank recorded the highest net selling among the five largecap stocks identified in the Dolat Capital report.

Mutual funds sold shares worth a net Rs 4,040 crore in the private-sector lender during August.

The selling comes despite ICICI Bank remaining one of the major largecap stocks in the Indian banking sector.

A reduction in mutual fund holdings in a particular month does not necessarily indicate a change in the long-term investment view of all fund managers. Portfolio managers can buy or sell stocks for a variety of reasons, including valuation, sector allocation, profit booking, risk management and changes in portfolio strategy.

Infosys Records Rs 2,911 Crore Net Selling

IT major Infosys was the second-largest largecap stock by mutual fund net selling in the Dolat Capital data.

The company saw mutual fund selling worth approximately Rs 2,911 crore in August.

The IT sector was among the areas where largecaps accounted for a substantial share of mutual fund outflows during the month. This indicates that portfolio adjustments were not limited to a single company but extended across parts of the technology sector.

Eternal Sees Rs 2,389 Crore Selling

Eternal, the company formerly known as Zomato, was another major largecap stock where mutual funds reduced their exposure.

The Dolat Capital data showed net mutual fund selling of approximately Rs 2,389 crore in August.

However, a separate Motilal Oswal analysis based on changes in shares held by mutual funds showed Eternal's aggregate mutual fund holding declining 4.6% month-on-month in August. Mutual funds held around 269.27 crore shares at the end of August, according to that dataset.

The difference between the two datasets illustrates why investors should distinguish between net selling value and percentage changes in shares held. The measures use different methodologies and can provide different perspectives on portfolio activity.

Tech Mahindra Among Stocks With Significant Selling

Tech Mahindra ranked fourth among the five largecap stocks in the Dolat Capital data, with mutual fund net selling of approximately Rs 1,843 crore in August.

The company was also among the Nifty 50 stocks that saw a meaningful reduction in mutual fund shareholding in the Motilal Oswal analysis.

According to the latter data, mutual fund holdings in Tech Mahindra declined 4.7% month-on-month in August.

The two data points therefore show both a significant rupee-value reduction and a decline in aggregate shares held.

PFC Records Rs 1,576 Crore Selling

Power Finance Corporation was the fifth company on the Dolat Capital list.

Mutual funds recorded net selling of approximately Rs 1,576 crore in PFC during August.

PFC is a major financial institution focused on financing India's power sector. The selling therefore also contributed to the broader reduction in mutual fund exposure to largecap financial stocks during the month.

IT and Banking Stocks Face Selling Pressure

One notable feature of the August data is the concentration of selling in certain sectors.

According to Dolat Capital, largecaps accounted for most of the mutual fund outflows from IT, banks, oil and gas, power and construction. At the same time, largecaps accounted for the majority of inflows into metals, telecom, FMCG and realty.

This suggests that mutual fund portfolio changes were not simply a broad-based exit from largecap companies.

Instead, fund managers appeared to be reallocating exposure between sectors and individual companies.

Mutual Funds Were Still Buying Largecap Stocks

The selling in five prominent largecaps should also be viewed against broader portfolio activity.

Motilal Oswal's Fund Folio report found that mutual funds were net buyers in 21 of the 50 Nifty stocks in August, equivalent to 42% of the index.

The same report showed buying in stocks such as:

• Dr Reddy's Laboratories

• Coal India

• Tata Steel

• Max Healthcare Institute

• UltraTech Cement

Dr Reddy's Laboratories recorded the largest percentage increase in mutual fund shares held, at 11.4%, while Coal India saw a 9.9% increase.

This indicates that mutual fund managers were continuing to deploy capital in largecaps even as they reduced holdings in some other companies.

Largecap Selling Does Not Mean Mutual Funds Are Leaving Equities

It is important not to interpret selling in individual largecap stocks as a broad exit from equities.

Mutual fund portfolios are actively managed, and fund managers regularly adjust positions based on their investment mandates and changing market conditions.

In August, mutual fund buying was broader outside largecaps as well. Motilal Oswal found mutual funds were net buyers in 55% of Nifty Midcap 100 stocks and 64% of Nifty Smallcap 100 stocks.

The data therefore points to portfolio rotation rather than a uniform reduction in equity exposure.

Why Do Mutual Funds Sell Largecap Stocks?

There can be several reasons for a mutual fund to reduce its holding in a largecap stock.

Valuation Changes

If a fund manager believes a stock's valuation has become less attractive relative to other opportunities, the position may be reduced.

Portfolio Rebalancing

Mutual funds periodically rebalance portfolios to maintain their desired exposure to sectors, companies and risk levels.

Profit Booking

After a substantial rise in a stock, a fund may sell part of its holding to book gains or reduce concentration.

Sector Rotation

Fund managers may shift money from one sector to another depending on their assessment of earnings, valuations and market conditions.

Risk Management

A fund may reduce exposure to a company or sector to control portfolio risk even if its long-term view remains constructive.

Therefore, mutual fund selling alone cannot establish why a particular fund manager reduced a position.

ICICI Bank and Eternal Need to Be Viewed Differently

Although ICICI Bank and Eternal appear together in the top-five selling list, they represent very different businesses.

ICICI Bank is a major private-sector financial institution, while Eternal operates in consumer technology and internet businesses.

Their inclusion in the same selling table reflects the amount of mutual fund selling, not similarity in business fundamentals.

Investors should therefore avoid interpreting the list as a ranking of companies based on business quality or future performance.

What Does the Data Say About Nifty 50 Portfolio Changes?

The Motilal Oswal data provides another useful view of August portfolio movements.

Among Nifty 50 companies, mutual funds increased their shareholding in 21 stocks and reduced holdings in several others. The largest reductions included Grasim Industries, Bajaj Finserv, Bajaj Auto, Tech Mahindra and Eternal.

Grasim Industries recorded the largest percentage decline in mutual fund shares held at 9.7%, followed by Bajaj Finserv at 5.8%, Bajaj Auto at 5.4%, Tech Mahindra at 4.7% and Eternal at 4.6%.

This dataset differs from Dolat Capital's ranking because it measures month-on-month changes in shares held, while the Dolat Capital figures cited above focus on net selling value.

How Investors Should Read Mutual Fund Selling Data

Mutual fund portfolio disclosures can provide useful information about where professional investors are changing exposure.

However, investors should not treat a stock appearing on a selling list as an automatic sell signal.

A more complete analysis should consider:

• Company's earnings growth

• Revenue and profit trends

• Valuation

• Debt levels

• Cash flows

• Sector outlook

• Management commentary

• Mutual fund ownership trends over several months

• Changes in institutional ownership

• Overall portfolio allocation

A single month's selling can reflect temporary portfolio rebalancing rather than a fundamental change in a company's prospects.

August Data Shows Active Portfolio Rotation

The August 2026 data suggests that mutual fund managers were actively rotating their largecap exposure.

While ICICI Bank, Infosys, Eternal, Tech Mahindra and PFC recorded substantial net selling in the Dolat Capital data, other largecaps attracted higher mutual fund exposure.

The divergence across sectors indicates that the mutual fund industry was not following one uniform strategy during the month.

Instead, fund managers were adjusting holdings across banking, IT, consumer technology, power, metals, healthcare and other sectors.

What Should Investors Watch Next?

Investors tracking institutional activity should examine whether August's selling continues in subsequent months.

If mutual funds repeatedly reduce holdings in the same stock, it may provide more information than a one-month transaction.

Similarly, sustained buying can offer a clearer picture of institutional positioning than a single month's increase.

However, even persistent institutional buying or selling should be combined with fundamental analysis rather than used independently.

Key Takeaways

IndicatorAugust 2026ICICI Bank net MF sellingRs 4,040 croreInfosys net MF sellingRs 2,911 croreEternal net MF sellingRs 2,389 croreTech Mahindra net MF sellingRs 1,843 crorePFC net MF sellingRs 1,576 croreNifty 50 stocks with MF net buying21Nifty 50 stocks with MF net buying share42%

The five selling figures are from Dolat Capital's Indian Mutual Fund Industry Overview, while the Nifty 50 buying statistic is from Motilal Oswal's Fund Folio report.

Bottom Line

ICICI Bank, Infosys, Eternal, Tech Mahindra and Power Finance Corporation were the five largecap stocks with the highest mutual fund net selling values in August 2026, according to Dolat Capital's industry overview.

ICICI Bank topped the list with Rs 4,040 crore of net selling, followed by Infosys at Rs 2,911 crore and Eternal at Rs 2,389 crore. Tech Mahindra and PFC recorded net selling of Rs 1,843 crore and Rs 1,576 crore, respectively.

Separate Motilal Oswal data also showed reduced mutual fund shareholding in several Nifty 50 companies, including Eternal and Tech Mahindra, while mutual funds simultaneously increased exposure to stocks such as Dr Reddy's Laboratories and Coal India.

The August data therefore reflects active portfolio rebalancing rather than a blanket exit from largecap equities. Investors should examine the reasons behind institutional transactions, company fundamentals and longer-term ownership trends before drawing conclusions from a single month's mutual fund selling.