The number
Equity mutual funds held ₹3,77,580 crore in Indian capital goods and construction companies on their latest portfolio disclosures. That was 10.66% of everything they held in Indian shares, and 10.04% of their net assets. Of the sectors in this series, only banks, at 16.96%, took more.
The data is the AMCs' monthly portfolio disclosures for 594 schemes in SEBI's equity categories from 48 fund houses, one row per scheme. 527 are for 30 September 2026 and 67 (Bandhan, LIC MF, HSBC, Edelweiss, NJ, 360 ONE, Capitalmind) for 31 August. Index funds, ETFs, hybrids and foreign companies are left out. A holding's rupee value is its weight times the scheme's net assets; for Tata and Sundaram, whose September files carry no rupee values, we use their July to September average AUM. Each company takes the industry label most AMCs give it. 517 of the 594 schemes held at least one of these companies.
"Capital goods and engineering" here means five of the AMCs' industries:
| Industry | Companies | Value (₹ crore) | Share of sector money |
|---|---|---|---|
| Industrial Products | 86 | 1,19,161 | 31.56% |
| Electrical Equipment | 41 | 1,08,075 | 28.62% |
| Construction | 33 | 71,304 | 18.88% |
| Aerospace & Defense | 18 | 46,099 | 12.21% |
| Industrial Manufacturing | 43 | 32,940 | 8.72% |
Industrial products covers engines, cables, pipes, bearings and castings; electrical equipment covers transformers, switchgear, solar cells and power plant gear. Commercial, tractor and construction vehicle makers (₹25,983 crore) are left out because the auto stocks post counted them.
Which companies
| Company | Schemes holding it | Value (₹ crore) | Share of sector money |
|---|---|---|---|
| Larsen & Toubro | 244 | 46,897 | 12.42% |
| Bharat Electronics | 172 | 21,048 | 5.57% |
| Apar Industries | 93 | 13,807 | 3.66% |
| GE Vernova T&D India | 143 | 13,705 | 3.63% |
| Hindustan Aeronautics | 126 | 13,584 | 3.60% |
| Cummins India | 140 | 12,649 | 3.35% |
| Bharat Heavy Electricals | 123 | 11,698 | 3.10% |
| CG Power and Industrial Solutions | 103 | 9,615 | 2.55% |
| KEI Industries | 89 | 8,890 | 2.35% |
| Kalpataru Projects International | 58 | 8,206 | 2.17% |
The money is spread thin. The ten above add up to 42.40% of it, against 55.53% for the ten largest auto holdings on the same disclosures, and 211 other companies share the rest. In banks, two names alone are nearly half.
Defence is two companies deep. Bharat Electronics and Hindustan Aeronautics hold 75.13% of the Aerospace & Defense money; Data Patterns, the third, is ₹2,143 crore.
Large caps own L&T, small caps own the rest
Category holdings as a share of the category's net assets:
| Category | Schemes | In the sector |
|---|---|---|
| Small Cap | 36 | 16.88% |
| Multi Cap | 33 | 12.39% |
| Sectoral / Thematic | 255 | 12.16% |
| Mid Cap | 34 | 11.10% |
| Large & Mid Cap | 36 | 9.92% |
| Dividend Yield | 12 | 7.76% |
| ELSS | 50 | 7.40% |
| Contra | 5 | 7.30% |
| Large Cap | 35 | 6.86% |
| Flexi Cap | 46 | 6.79% |
| Focused | 28 | 5.82% |
| Value | 24 | 5.62% |
Small-cap funds hold the most, and most of it in industrial products (46.09% of their sector money). For large-cap funds the sector is mostly one stock: Larsen & Toubro is 53.87% of what they hold in it.
Against the index
NSE splits this area into two sectors and counts vehicle makers inside capital goods. Matched that way, on NSE's factsheets for 30 September 2026:
| NSE sector | Equity funds | Nifty 50 | Nifty 500 |
|---|---|---|---|
| Capital Goods | 9.38% | 1.33% | 7.50% |
| Construction | 2.01% | 4.20% | 2.72% |
Funds are heavier than the broad market in capital goods and lighter in construction. In the Nifty 50 each sector is a single stock: Bharat Electronics for capital goods and L&T for construction, at a 4.20% index weight. Funds held 1.32% of their Indian shares in L&T.
The stocks are not cheap. On 9 October 2026 the Nifty India Defence traded at a P/E of 56.11 and the Nifty India Manufacturing at 26.37, against 19.27 for the Nifty 50.
The heaviest holders
The sector funds sit at the top. Invesco India Infrastructure Fund had 65.90% of its ₹1,489 crore in these companies and HSBC Infrastructure Fund 58.96%. HDFC Defence Fund, the only active defence fund, had 56.15% of its ₹11,493 crore here, and 46.11% of the fund in Aerospace & Defense alone. Manufacturing funds ranged from 17.95% (quant) to 41.93% (Canara Robeco Manufacturing), because they own other factories too: HDFC Manufacturing Fund had 15.68% in pharma and 21.57% in vehicle and parts makers.
Among diversified funds, Motilal Oswal ELSS Tax Saver had 32.81%, Motilal Oswal Large and Midcap Fund 31.49% and Franklin India Multi Cap 30.26%.
In rupees, Nippon India Small Cap Fund was far ahead at ₹18,124 crore, 22.41% of the fund. Kotak Mid Cap Fund (₹7,013 crore), SBI Small Cap Fund (₹6,968 crore) and HDFC Defence Fund (₹6,453 crore) followed.
What this does not tell you
It is one disclosure per scheme, mostly September with some August. Nothing here shows whether funds were adding or selling.
Labels are the AMCs'. Some defence suppliers sit outside these five: Solar Industries is filed under Chemicals and Bharat Forge under Auto Components. Shipbuilders such as Cochin Shipyard and Mazagon Dock, and the wagon maker Titagarh Rail, are under Industrial Manufacturing and are counted.
The index comparison is approximate. NSE weights by free-float market value, and a few companies may sit in a different industry in its list.
Weight is not a forecast, and none of this is a recommendation to buy or sell any stock or fund.
Where to go from here
Each company's page lists the schemes that hold it; the stocks hub lists every company in fund portfolios. Manufacturing funds beat infrastructure funds by 6 points compares how those sector funds have done, and the guide to infrastructure and PSU funds covers what they own. Every sectoral and thematic fund is listed in one place.
Frequently asked questions
How much mutual fund money is in capital goods stocks?
On the latest monthly disclosures, mostly for 30 September 2026, the 594 schemes in SEBI's equity categories held ₹3,77,580 crore in 221 Indian capital goods and construction companies. That is 10.66% of what they held in Indian shares and 10.04% of their net assets.
Which capital goods stock do mutual funds hold the most?
Larsen & Toubro, at ₹46,897 crore across 244 schemes, or 12.42% of the money in the sector. Bharat Electronics is second at ₹21,048 crore, then Apar Industries, GE Vernova T&D India and Hindustan Aeronautics at about ₹13,600 to ₹13,800 crore each.
Do mutual funds hold more capital goods than the index?
Yes, and far more than the Nifty 50. Counting commercial and farm vehicle makers as NSE does, capital goods were 9.38% of equity funds' Indian shareholdings, against 7.50% of the Nifty 500 and 1.33% of the Nifty 50 on 30 September 2026. Construction was the reverse: 2.01% for funds, 4.20% for the Nifty 50.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are WealthTicker’s own calculations from public data — AMFI’s fund NAVs and disclosures, NSE’s index and FII/DII files, and the fund houses’ monthly portfolios (how we calculate). They are as of the dates stated and can be revised by their source.
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