Equity MF Inflows Slip 22% in August to ₹33,430 Crore as NFO Activity Cools

Mumbai, September 10, 2025: Equity fund inflows slowed in August 2025 at ₹33,430 crore, down by 22% compared with ₹42,702 crore in July 2025. The slowdown was led by much weaker new fund offering (NFO) mobilization that fell to ₹2,859 crore during August from ₹30,416 crore in July.

Industry Overview

The industry registered gross total net inflows of ₹52,443 crore during August, significantly lower than ₹1,78,794 crore in July, on account of a turnaround in debt flows. Total Assets Under Management (AUM) were at ₹75.19 lakh crore as of 31st August, marginally lower than ₹75.36 lakh crore in the previous month.

Category-wise Net Flows

Mutual fund flows experienced volatility by category in August 2025. Net inflows were recorded in equity schemes at ₹33,430 crore, a decline of 22% compared to ₹42,702 crore in July. Hybrid schemes also posted a fall, as inflows fell by 27% to ₹15,294 crore from ₹20,879 crore in the last month.

Contrarily, other plans like ETFs and index funds recorded healthy growth, as flows surged 38% to ₹11,437 crore in July from ₹8,259 crore. The largest swing was that of debt plans, which shifted from heavy inflows of ₹1,06,801 crore during July to heavy outflows of ₹7,980 crore during August. Overall, aggregate net flows took a notable dip, sliding from ₹1,78,794 crore during July to only ₹52,443 crore during August 2025.

Source: AMFI Monthly Reports (Jul & Aug 2025)

Equity Segment Trends

• Flexi Cap Funds: ₹7,679 crore inflows in Aug, unchanged from ₹7,654 crore in Jul.
• Mid Cap Funds: ₹5,331 crore vs. ₹5,182 crore previously.
• Small Cap Funds: ₹4,993 crore, down from ₹6,484 crore in Jul.
• Sectoral/Thematic Funds: ₹3,893 crore vs. ₹9,426 crore in Jul.
• Dividend Yield Funds: Outflows of ₹175 crore in Aug compared with inflows of ₹97 crore in Jul.

Debt and Hybrid Flows

• Debt: Following a strong inflow of ₹1.06 lakh crore in July, debt schemes saw ₹7,980 crore of outflows in August, driven by liquid fund redemptions of ₹13,350 crore.
• Hybrid: Arbitrage funds raised ₹6,667 crore in August compared to ₹7,296 crore in July, while balanced advantage funds tapered to ₹2,316 crore from ₹2,611 crore.

NFO Mobilization: Drastic Fall

NFOs were the most significant point of difference between July and August.

• July 2025: 30 fresh schemes opened, raising ₹30,416 crore, led by ₹7,404 crore through thematic funds and ₹1,127 crore through a small-cap offer.
• August 2025: Just 23 schemes opened, raising ₹2,859 crore, with ₹1,422 crore from thematic funds and ₹634 crore from a mid-cap offer.

New Fund Offer (NFO) collections plummeted sharply in August 2025. The schemes rolled out decreased from 30 in July to 23 in August, while funds raised fell from ₹30,416 crore to mere ₹2,859 crore. This indicates a sharp slowdown in new fund mobilisation from the previous month.

Outlook

Though the decline in equity flows indicates reliance on NFO activity, SIP-driven retail participation remains buoyant. Flexi-cap, mid-cap, and sector funds remain popular with investors. Debt categories, though, may remain volatile with shifting liquidity dynamics, while hybrid schemes get a boost from stable arbitrage spreads.

REF: https://portal.amfiindia.com/spages/amaug2025repo.pdf

https://portal.amfiindia.com/spages/amjul2025repo.pdf

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations