Retail investors appear to have stepped back into equities in March despite volatile markets, with flows tilting sharply toward riskier segments, according to Nomura’s latest Net Flow Navigator estimates.
Nomura estimates that net equity inflows into mutual funds, excluding arbitrage, rose to Rs 43,600 crore (about $5.2 billion) in March 2026, marking a 16% month-on-month increase.
The brokerage’s analysis suggests that the recent correction has not triggered broad retail selling. Instead, flows indicate selective buying, particularly in segments that had seen sharper drawdowns.
Flexi Cap, Mid Cap and Small Cap funds drive estimated inflows
Nomura estimates that equity inflows were led by core active categories, with flexi cap, midcap and small-cap funds accounting for a significant share of incremental money.
Flexi cap funds are estimated to have attracted Rs 9,800 crore (about $1.17 billion) in March, while small-cap funds likely saw inflows of Rs 6,000 crore (about $720 million) and midcap funds about Rs 5,100 crore (about $610 million).
Nomura notes that all three categories are estimated to have seen sequential growth of roughly 40% to 54%, which it interprets as a sign of returning retail risk appetite.
At the same time, the brokerage estimates a clear moderation in hybrid allocations. Multi-asset allocation inflows are expected to have declined by about 39% month-on-month, while dynamic asset allocation flows likely turned negative, suggesting a rotation away from defensive positioning toward direct equity exposure.
ICICI Prudential AMC: Estimated to gain the most market share
Nomura estimates that ICICI Prudential Asset Management Company was the largest gainer in terms of flow market share in March.
Its share of industry inflows is estimated at around 20.9%, significantly higher than its AUM share of about 14.1%, implying meaningful market share gains during the month.
According to Nomura, ICICI Prudential Asset Management Company is estimated to have dominated flows in large cap as well as large and mid cap categories. The brokerage’s scheme-level analysis suggests that the fund house saw a sharp pickup in large and mid cap inflows, with market share rising materially on a sequential basis.
Nomura also notes that ICICI AMC’s equity AUM growth of about 1.9% quarter-on-quarter outpaced the broader industry, supporting its flow estimates.
Nippon India AMC: Strong estimated flows in small and multi cap
Nomura identifies Nippon Life India Asset Management as another key outperformer in March.
The brokerage estimates Nippon’s flow market share at around 9.7%, ahead of its AUM share of about 7.1%, indicating continued market share gains.
Nippon is estimated to have seen strong traction in small cap and multi cap funds. Nomura’s analysis also suggests that the AMC held a leading position in large cap inflows during the month, alongside ICICI.
Nomura reiterates its positive stance on Nippon AMC, citing consistent gains in flow share across cycles.
HDFC AMC: Steady positioning, limited incremental gains
Nomura estimates that HDFC Asset Management Company maintained a relatively stable position in March.
Its flow market share is estimated at around 13.5%, broadly in line with its AUM share, indicating stability but slower incremental gains compared to peers.
The brokerage highlights that HDFC AMC continues to hold strong positions across flexi cap, mid cap and small cap categories, even as it does not appear to be gaining share as aggressively as some competitors.
Parag Parikh AMC: Flexi cap strength drives outsized estimated gains
Nomura estimates that Parag Parikh Financial Advisory Services emerged as a significant share gainer in March.
The fund house’s flow share is estimated at around 9.6%, sharply higher than its AUM share of about 2.9%.
This outperformance is largely attributed to its dominance in flexi cap funds, where Nomura estimates it accounted for roughly 40% of inflows, reflecting strong investor preference for its strategy during periods of market correction.
Bandhan AMC: Small-cap exposure fuels estimated surge
Nomura also highlighted Bandhan AMC as another notable gainer.
The brokerage estimates its flow share at about 9.8%, compared with an AUM share of roughly 2.0%, implying sharp gains in relative positioning.
This performance is driven primarily by small cap funds, where Bandhan is estimated to have commanded around one-third of industry inflows during the month.
Broader industry: Flows concentrated in key equity categories
Nomura estimates that inflows remained concentrated, with a handful of categories accounting for the bulk of industry flows.
Flexi cap, small cap, mid cap, large and mid cap, large cap and multi cap funds together are estimated to have contributed more than 80% of total inflows in March, indicating a continued preference for mainstream equity strategies.
Market context: Flows remain resilient despite correction
Nomura highlights that this flow resilience comes despite a weak market backdrop.
Benchmark indices declined sharply during the quarter, with large caps down around 14% and mid and small-caps falling in the range of 13% to 15%. Despite this, industry equity AUM remained broadly flat on a sequential basis, suggesting that inflows offset mark-to-market losses.
Conclusion
Nomura’s analysis indicates that retail investors are not exiting equities in response to volatility. Instead, flows suggest a shift toward selective accumulation, particularly in segments that offer higher growth potential.
The brokerage notes that ICICI Prudential AMC and Nippon India AMC are the key beneficiaries of this trend, while Parag Parikh and Bandhan AMC are gaining share through strong positioning in specific categories.
Overall, Nomura’s estimates point to a market where retail participation remains intact, with capital rotating rather than withdrawing.
Disclaimer: Investors should note that this report is based on third-party brokerage estimates and market analysis, which may not reflect final regulatory filings. While the data indicates trends in mutual fund categories including small-cap and mid-cap segments, these investments carry higher volatility and market risk. This information is for educational purposes only and does not constitute a specific recommendation to buy, sell, or hold any financial instrument. We strongly advise consulting a SEBI-registered investment advisor to assess your risk appetite before making any investment decisions.
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