At the end of March, equity funds held ICICI Bank shares worth Rs 9,152 crore, while Infosys shares were valued at Rs 7,339 crore, according to a report by investment and mutual fund research provider Morningstar.
At the end of October-December quarter, equity funds held shares worth Rs 8,194 crore in ICICI Bank and Rs 9,262 crore in Infosys.
"ICICI Bank gained favour as the most popular stock. However, it was a rise in stock price by more than 13 per cent during the quarter that helped the stock be on top of the chart," Morningstar said.
It added: "Although ICICI Bank witnessed a tremendous increase in market value of shares held, by the end of the quarter it saw a reduction in number of shares held by equity mutual fund."
The Infosys stock, meanwhile, plunged by more than 5 per cent. Infosys brought back N R Narayana Murthy from retirement in June last year to revive the company's sagging fortunes.
Once a poster boy for the USD 110-billion Indian IT-BPO sector, Infosys has been battling top level exits, which analysts have raised concerns about. Over the last two years, Infosys has seen nine top level exits including leaders who were tipped to be in fray for the top job.
The IT giant, which has been losing market share to industry peers in recent years, expects its dollar revenues to grow at 7-9 per cent for the 2014-15 fiscal. It is way below industry body Nasscom's projection of 13-15 per cent for the sector.
"Infosys, the top held stock of equity funds during the start of the quarter, was ousted by ICICI Bank, which gained favour as the most popular stock by the end of this quarter," the report said.
Infosys is followed by HDFC Bank (where equity funds held shares worth Rs 6,709 crore), Larsen & Toubro (Rs 5,784 crore) and Reliance Industries (Rs 5,336 crore).
Overall, fund managers increased their exposure to financial services sector mainly due to decline in inflation levels, improve in asset quality and signs of economic recovery.
Moreover, equity funds increased their allocation to financial services to around 24 per cent at the end of March quarter from nearly 22 per cent.
Equity mutual funds have been steadily decreasing exposure to mid-cap stocks and focusing on large-cap stocks over the past few quarters.