Cash reserves in Indian equity mutual funds have fallen to their lowest level in five years, as portfolio managers deploy capital into the market.
The reduction in cash holdings reflects a concerted buying spree by fund houses, which are viewing recent pullbacks in key sectors as entry points rather than signs of weakness.
The buying activity has been concentrated in large-cap private banks and information technology stocks, which have seen recent price declines.
Major funds, including the Parag Parikh Flexicap Fund, have significantly trimmed their cash positions to increase equity exposure.
This move suggests that domestic institutional investors remain bullish on the structural growth prospects of these sectors, despite short-term volatility.
This aggressive deployment of capital in India stands in contrast to trends in Western markets.