ICICI Bank Surpasses HDFC Bank as Top MF Holding
By Business Desk
ICICI Bank overtakes HDFC Bank in July 2026, ending its three-year dominance as the most valued stock in mutual fund portfolios. Explore the market shift.
ICICI Bank has officially overtaken HDFC Bank in July 2026, securing its position as the most-valued stock in mutual fund portfolios. This shift concludes HDFC Bank’s three-year reign at the top of these significant institutional holdings.
Mutual funds now hold approximately ₹3.01 lakh crore in ICICI Bank shares. This compares to ₹2.96 lakh crore invested in HDFC Bank shares, marking a definitive re-ranking in the Indian financial landscape.
Despite this change in portfolio value, HDFC Bank maintains its status as the larger lender by market capitalization. It also trades at a lower price-to-book multiple of 1.78x, contrasting with ICICI Bank’s 2.43x.
HDFC Bank’s Underperformance Factors
HDFC Bank’s shares have experienced a nearly 27% decline during 2026, reaching a 52-week low. In stark contrast, ICICI Bank’s stock has seen a rise of about 7% over the same period.
Analysts attribute HDFC Bank’s valuation discount to several critical factors. These include ongoing governance concerns, unresolved leadership succession issues, and a concentrated selling trend by Foreign Institutional Investors (FIIs).
ICICI Bank’s Clear Management Trajectory
ICICI Bank, conversely, benefits from a clearer management trajectory and investor confidence. The Reserve Bank of India (RBI) has already approved CEO Sandeep Bakhshi’s two-year reappointment, providing stability.
HDFC Bank, however, continues to face uncertainty regarding its executive leadership. CEO Sashidhar Jagdishan’s current term is set to conclude in October 2026, while an interim chairman’s tenure will expire in September 2026.
Despite the significant re-positioning in portfolio value, mutual fund ownership actually increased in both banks. This suggests a strategic reallocation of assets rather than a complete divestment from HDFC Bank.
The long-term outcome of this competitive dynamic remains open. It is contingent on HDFC Bank’s ability to resolve its leadership uncertainties and ICICI Bank’s sustained performance in the market.