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.

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.

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.

Equities were little changed in a quiet stretch of trading last week, with the S&P 500 index rising 0.4%, and the Nasdaq Composite edging up 0.1%. The S&P 500’s largest single-day move was a 0.65% gain on Thursday, when it reached its 27th record close of the year. The Nasdaq failed to log a daily move of 1% or more, in either direction, for the first time since the week ending May 1.

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Mumbai: Securities and Exchange Board of India Chairman Tuhin Kanta Pandey on Monday said the regulator will examine and address issues in the new Closing Auction Session (CAS), while ruling out scrapping the mechanism simply because some market participants want to trade options differently.

“We are talking to participants about the concerns. We are analysing the issues and will soon come with a view,” Pandey said on the sidelines of Sebi’s Symposium on Cyber Defence event held in Mumbai. He reiterated that CAS is here to stay and is looking at concerns raised by traders and other market participants before deciding whether any changes are needed.

The CAS replaced the earlier practice of determining the closing prices based on the average price of trades in the final 30 minutes of regular trading.

Since August 3, the closing prices of 200-odd stocks in the futures and options (F&O) segment have been determined through an auction process lasting about 20 minutes – from 3.15 pm to around 3.35 pm. The move is aimed at making the closing rates less susceptible to the impact of large, price-distorting last-minute orders.

The new mechanism, however, has sparked uncertainty, as losses in F&O trades have sparked protests from traders and other market participants.

The Securities and Exchange Board of India (Sebi) is reviewing feedback from market participants, discussions on social media, expiry-day data and other suggestions before deciding whether any changes are needed to improve the system, said Pandey.
“If there are issues that can be improved, they will be done soon,” Pandey said. Pandey cautioned against creating “unnecessary” concerns around its functioning.”CAS cannot be tracked on a day-to-day basis. Unnecessary issues should not be created in the market. Indicative prices are extremely important for traders,” he said.

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

Pandey said Sebi’s consultation paper on the securities lending and borrowing mechanism (SLBM) is expected “very soon”.

Sebi has formed a working group to review the nearly two-decade-old framework. The review is aimed at improving the link between the cash and derivatives markets, strengthening price discovery and reducing settlement-related pressure. Under SLBM, investors can lend their shares to other investors for a fixed period in return for a fee. Borrowers can use these shares for short selling or other market-related needs.

Operator

Thank you for standing by, and welcome to the Reliance Worldwide Corporation Full Year Earnings Call. [Operator Instructions]

I would now like to hand the conference over to Heath Sharp, CEO. Please go ahead.

Heath Sharp
CEO, MD & Director

Good morning, everyone. Welcome to RWC’s Financial Year 2026 Results Call. This is Heath Sharp, and I’m joined here in Sydney by Andrew Johnson, our CFO.

This morning, we released our full year results material. But before we turn to the results, I want to deal with our second announcement this morning. So let’s start on Slide 3 of our presentation.

RWC has entered into a process deed with Brookfield Capital Partners on August 17. This relates to Brookfield’s unsolicited nonbinding indicative proposal to acquire RWC for AUD 4.75 cash per share. The proposal follows earlier approaches from Brookfield at $4.15, $4.25 and $4.50 per share, which the board considered insufficient.

Following a period of engagement including providing Brookfield with nonpublic information over an approximately 8-week period, Brookfield submitted its current $4.75 proposal. The proposal values RWC at an enterprise value of approximately AUD 4.1 billion. This represents an FY ’26 EV-to-EBITDA multiple of 12.9x on a pre-AASB 16 basis. This is at the upper end of

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