Mutual Funds Hold ₹2.15 Lakh Crore in Cash: Caution, Strategy, or Opportunity

Equity Mutual Funds are sitting with a cash of Rs 2.15 lakh crore. So, if we look at the net inflows that come in Mutual Funds every month, that is approximately Rs 25,000 crore. So, it means that Mutual Funds right now have so much cash that the inflow for the next 9 months can remain. And if we look at it in a percentage of the total AUM, then that is approximately 7%. So, the cash that Mutual Funds are keeping in their total AUM right now is 7%. And this cash percentage is increasing every month. In November 2024, it was 5.8%. In April 2025, it has become 7%. And if we look at which Mutual Fund house is holding the most cash, then number 1 is SBI Mutual Fund holding about Rs 36,000 crore cash followed by ICICI, it is Rs 28,000 crore, then HDFC. And if we look at which Mutual Fund is holding the most cash in its total AUM, then number 1 is Parag Parikh Mutual Fund. They are holding 23% of their total AUM in cash. For example, if their total AUM is 1 lakh, then they are holding 23,000 in cash. Only 77,000 are invested. And on the second number is Motilal Oswal. They are holding what, 17.8% cash. And third is Quant Mutual Fund. They are holding 13% cash. And if we look at the reason why Mutual Funds are holding so much cash, then number 1 can be if due to any global market uncertainty, like tariff, trade wars, or the bond yields of major countries are increasing, if there is heavy FI selling due to any of these factors, then that selling can be absorbed. Second major reason can be the supply that is going to come in the market, like new IPOs, existing IPOs are running out of lock-in, offer for sale, or if a foreign fund exits through a block deal in an Indian stock, then to absorb that supply, Mutual Funds are holding cash. But one thing is sure, if FI started selling heavy again, Mutual Funds have enough cash to absorb that selling. So, what do you think, why Mutual Funds are holding about Rs 2.15 lakh crores?