In July, mutual funds increased holdings in small and mid-cap stocks, with Biocon and PB Fintech leading the charge, as the healthcare sector outperformed broader markets amid sustained growth and investor interest in defensive sectors.
Mutual funds increased their exposure to several small and mid-cap stocks in July, with Biocon and PB Fintech emerging as the most popular buys in a month when healthcare remained one of the market’s stronger themes. According to the Business Standard report, pharmaceutical shares have been among the better-performing segments in recent months, with Nifty Pharma gaining nearly 20 per cent in FY27 up to the end of July, while Biocon rose 18 per cent over the same period.
That broader strength fits with market data showing the pharmaceutical sector has beaten the wider market this year. Kotak Neo said Nifty Pharma was up 14.53 per cent year to date, even as the Nifty 50 fell 7.87 per cent, helped by faster sales growth in the Indian Pharmaceutical Market and firmer demand for chronic therapies, new launches and pricing support. Mint also reported that investors have favoured defensive sectors amid volatility, with domestic formulations and improving earnings visibility adding to the appeal.
Alongside Biocon, fund managers also added to positions in PB Fintech, Diamond Power Infrastructure, Swiggy, Sterlite Technologies, Lenskart Solutions, 360 One WAM and Meesho, according to the Business Standard data. Diamond Power stood out for the scale of buying: the total number of shares held by mutual funds surged 105 times in July, with fund managers deploying about ₹1,300 crore into the stock, which had a market value of roughly ₹22,000 crore. The company has been helped by spending linked to data centres and a wider transmission capital-expenditure cycle.
Biocon’s recent operating results may also have supported investor interest. The company said it posted consolidated operating revenue of ₹4,173 crore in the third quarter of FY26 and ₹4,569 crore in the fourth quarter, while full-year FY26 total income reached ₹17,270 crore. It reported EBITDA of ₹3,798 crore for the year and net profit before exceptional items of ₹436 crore, figures that suggest the business entered the current year with firmer financial momentum.
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