Mutual funds aggressively booked profits in April, offloading an estimated ₹17,000 crore from 10 major stocks including HDFC Bank, Wipro, and Vedanta. According to market data from PRIME Database, at least 109 stocks witnessed mutual funds selling shares worth at least ₹100 crore each last month. However, the exodus was heavily concentrated at the top, with the ten largest exits bearing the brunt of the institutional liquidation. As reported by The Economic Times, this strategic sell-off occurred amid concerns over earnings risks, geopolitical uncertainty, and stretched valuations, even as many of these stocks saw significant rallies.
Tata Mutual Fund highlighted that equity valuations have normalised with Nifty-50 at a 12-month forward PER of 19x, but warned that earnings risks have risen as the resolution to the West Asia conflict gets delayed further. The fund house cautioned that input costs and supply chain disruptions could lead to downside both on growth and margins, with crude price pass-throughs adding further pressure. According to The Economic Times, this could drag FY27 earnings growth down from a consensus of 17% to just 12-15%, delaying the recovery in valuations.
HDFC Bank experienced the biggest selling pressure, with the house divided as Nippon and ICICI Prudential AMC added to their positions while Axis MF, SBI MF, Edelweiss, Invesco, Sundaram, Tata, and Motilal Oswal sold. Most strikingly, Quant MF made a complete exit from the stock. Despite the selling, brokerages continue to back the name, with analysts saying easing of tensions around the West Asia conflict could ease concerns and aid a re-rating. Wipro's stock climbed 7.6% in April yet saw a ₹2,322 crore exit due to AI fears and weak IT services trends.
Other major exits included Hindalco Industries which surged 17% in April but saw mutual funds net sell ₹1,961 crore, with Aditya Birla Sun Life, SBI, and Kotak among the sellers. Bajaj Auto rallied 14.6% but mutual funds net sold ₹1,559 crore. GE Vernova T&D India jumped 22% in April, yet MFs still exited ₹1,248 crore net. NTPC and Asian Paints each saw net outflows of ₹1,167 crore and ₹891 crore respectively, while Avenue Supermarts recorded ₹841 crore in net selling.
The April sell-off represents a disciplined repricing of risk by booking gains where stocks have run hard, and waiting for geopolitical fog to lift before committing fresh capital to large-cap heavyweights. As reported by The Economic Times, domestic brokerage Emkay Global warned of significant downside risk for Indian equities until the resolution of the Gulf conflict and reopening of the Strait of Hormuz, while expecting normalcy to return and viewing any weakness as an entry opportunity with discretionary and industrials as key overweights.
