Mutual Funds Make Highest Investment in Auto Sector in 10 Months – August 2025
Indian mutual funds, including Axis Mutual Fund, SBI Mutual Fund, and others, recorded significant buying in auto stocks during August 2025. Equity mutual funds were actively deploying capital, reflected in a drop in their total cash reserves from ₹1.85 lakh crore to ₹1.76 lakh crore during the month.
August witnessed a surge in block deals, which provided fund houses with new opportunities to invest incoming inflows. According to a report by Nuvama Alternative and Quantitative Research, leading Indian mutual funds repositioned themselves in the auto sector during this period.
Key Fund Activity in Auto Stocks
- Axis Mutual Fund increased its stake significantly by investing ₹564 crore in Maruti Suzuki and ₹305 crore in Hyundai Motor India.
- Franklin Templeton Mutual Fund invested ₹285 crore in Mahindra & Mahindra and ₹257 crore in Ashok Leyland.
GST Restructuring for Vehicles and Auto Components
In a major policy move, the Indian government restructured the GST rate slabs applicable to vehicles and auto parts. Notably, the compensation cess has been eliminated, effectively reducing the cost of many vehicles.
Under the new structure, the previous 12% and 28% slabs have been discontinued. The new GST structure includes 5%, 18%, and an additional 40% slab for high-end and luxury categories.