Business

ICICI Bank overtakes HDFC Bank as top MF holding in July

By Sohail Khan 18 August 2026, 5:50 am

Benchmarks
Nifty24,287.65-78.35

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
23.43 %

Invest Now

Enter search text:

Business News›Mutual Funds›Mutual Funds News›ICICI Bank overtakes HDFC Bank as top MF holding in July amid governance concerns

Read Today's Paper

ICICI Bank overtakes HDFC Bank as top MF holding in July amid governance concerns

Synopsis

ICICI Bank now leads mutual fund portfolios, surpassing HDFC Bank in July. This shift reflects investor concerns over HDFC Bank's leadership succession and governance issues. ICICI Bank has shown a steadier stock performance and stable results recently. Mutual funds have increased holdings in both banks, while overseas ownership has reduced. Reliance Industries, Bharti Airtel, and Axis Bank follow as top mutual fund holdings.

ICICI pips HDFC as MFs' top holding<br> — HDFC Bank is down 25% so far in 2026 amid concerns over profitability pressures, governance & succession

Mumbai: ICICI Bank, which has drastically narrowed its valuation gap with HDFC Bank this year, has emerged as the most valued stock holding in mutual fund (MF) portfolios in July, ending a three-year run at the top for India's biggest lender by market value.

Mutual funds currently hold around 3.94 billion shares of HDFC Bank, valued at ₹2.96 lakh crore, while their holding in ICICI Bank stands at around 2.10 billion shares, valued at ₹3.01 lakh crore.

ICICI Bank now accounts for 5.35% of equity MF holdings, compared with 5.24% for HDFC Bank. As of July, 514 MF schemes held shares of HDFC Bank, while 552 schemes held shares of ICICI Bank.

Best MF to invest

Looking for the best mutual funds to invest? Here are our recommendations.

View Details »

ICICI Bank's portfolio-topping surge isn't merely a reflection of institutional investors exiting HDFC Bank. Rather, it reflects lingering concerns over executive leadership succession and governance that remain key valuation drags for the country's biggest private-sector lender. "HDFC Bank has faced governance concerns following the resignation of its chairman, while there have also been concerns around certain events and the recent fine imposed on the CEO," said Siddharth Rajpurohit, lead analyst, Banking, Systematix Group. "Although the bank conducted an internal review through an independent agency, some concerns remain."

HDFC Bank had remained the top MF holding since July 2023 until June this year. The value of MFs' holding in HDFC Bank had hit a record high of more than ₹3.39 lakh crore in November 2025.

Contrasting Fortunes

The shift captures the contrasting stock performance of the two lenders. HDFC Bank fell 6.2% in July and is down 25% so far in 2026 amid concerns over profitability pressures, governance and succession, triggering record selling by foreign investors. The Street is concerned about leadership succession at HDFC Bank. Incumbent Chief Executive Sashidhar Jagdishan's second term is due to end in October, and the lender's board is evaluating his reappointment, the bank's leadership said last month during a post-earnings call.

ET Bureau

ICICI Bank, meanwhile, has had a steadier run, and its stock gained 4.4% in July and 7% so far this year. "In contrast, ICICI Bank delivered a stable set of results and does not face similar governance concerns. The extension of the tenure of its MD and CEO by another two years also provides greater clarity on management continuity." Rajpurohit said.

However, MFs have continued to increase their holdings in both lenders. Their collective stake in HDFC Bank currently stands at around 30.04%, up from 26.7% at the end of December 2025 and around 24% at the end of December 2024. In ICICI Bank, MF holding has risen to around 29.6% from 26.09% at the end of December 2025. Overseas fund ownership, by contrast, has reduced.

Reliance Industries is the third-most valued stock holding of MFs, with holdings worth around ₹1.75 lakh crore, accounting for 3.1% of equity assets under management (AUM). Bharti Airtel and Axis Bank rank fourth and fifth, with MF holdings of around ₹1.47 lakh crore and ₹1.3 lakh crore, respectively. They account for 2.6% and 2.3% of equity AUM, respectively.

Slim M-Cap Lead

To be sure, HDFC Bank remains the larger lender by market capitalisation. HDFC Bank's current market capitalisation stands at ₹11.21 lakh crore, compared with ₹10.18 lakh crore for ICICI Bank, although the valuation gap has narrowed significantly so far this year. The underperformance has resulted in HDFC Bank's valuations trading lower than ICICI.

HDFC Bank is trading at an estimated price-to-book ratio of 1.78 times, compared with 2.43 times for ICICI Bank.

Both stocks are trading below their respective five-year average price-to-book multiples – of 2.90 times for HDFC Bank and 2.99 times for ICICI Bank, respectively.

Rajesh Palviya, head of research, Axis Securities, said selling by foreign institutional investors (FII), which typically have a higher holding in HDFC Bank, is one of the reasons for the stock's underperformance. Following the abrupt resignation of the last chairman, many investors and traders have cut their exposure to the bank, putting pressure on the stock price.

In contrast, ICICI Bank reported strong overall numbers, which has helped the stock remain stable.

In the private banking space, ICICI Bank and Kotak Mahindra Bank are looking stable among large-cap names, Palviya said. HDFC Bank, meanwhile, continues to face uncertainty over leadership succession and corporate governance, Palviya said.

The divergence between the two stocks is likely to take some time to reverse, he added.

Read more: Sebi chairman says cyber defence must move from IT issue to boardroom priority

ICICI Bank currently appears to have an edge over its peer in analyst ratings, with 52 buys and no hold or sell ratings, compared with 48 buys, three holds and no sell ratings at the start of 2026. In contrast, HDFC Bank currently has 47 buy, one hold and no sell ratings, broadly unchanged since the start of the year.

Add as a Reliable and Trusted News Source
Add Now!

(Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The .)

…moreless
Read More News on
hdfc bankicici bankicicimfsSashidhar Jagdishanmarket capitalisationICICI BankHDFC Bankreliance industriesbharti airtel

(Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The .)

…moreless

Enter search text:

BrowseMutual Funds:
ABCDEFGHIJKLMNOPQRSTUVWXYZ
123456789

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year