ICICI Bank Ltd, HDFC Bank and Reliance Industries Ltd (RIL) were three stocks that saw Rs 25,000 crore worth mutual fund (MF) buying in May. Domestic funds owned a combined Rs 7,37,011 crore worth of these three stocks at the end of May, data shared by PRIME Database suggested.  

ICICI Bank saw MFs buying Rs 10,528.32 crore worth shares, as they upped stakes to 29.94 per cent at May end from 28.77 per cent in April. Their total stake in the bank was worth Rs 2,69,365.61 crore. ICICI Bank is Systematix's top banking pick with a buy rating and a target price of Rs 1,650. This brokerage has a 'Buy' on HDFC Bank with a target of Rs 940.  

MFs bought into a falling HDFC Bank, with their stakes rising to 25.19 per cent from 24.55 per cent month-on-month. As per PRIME database, MFs were net buyers to the tune of Rs 7,447.69 crore on the counter. They held Rs 2,88,678 crore worth HDFC Bank shares at the end of the month.

"FCNR, if the bank capitalises on the opportunity, can address the key balance sheet overhangs faster than the market expects. The more substantive risk is CEO succession, with the incumbent's term expiring in October 2026 and no clarity on renewal. Recent press around governance, adds to near-term investor caution. Both are worth monitoring. But the franchise is intact, the liability outlook is better than it has been in the recent past, and the stock is trading at decade-low multiples. We find the risk-reward favorable. Reiterate Buy," Nomura said.

MFs were also seen buying into a falling RIL stock. Reliance shares, which were down 7.7 per cent for the month, witnessed Rs 7,065.84 crore in net buying. They held a total Rs 1,78,967.88 crore worth RIL shares at May end. 

Equirus Securities in a note on RIL last week said the downside risks for the stock are largely priced in, while catalysts for re-rating are emerging, including improving O2C profitability, value unlocking in Jio, resilient Retail growth and new energy projects will start contributing in next few quarters. 

"Medium-term underperformance, near term positive earnings surprise in O2C and valuation near to post COVID low make risk-reward equation favourable. Consequently, we upgrade the stock to LONG from ADD with Sep’27 target of Rs 1,586," it said.