NEW DELHI: In a bid to give their portfolios an extra return boost, domestic mutual fund managers were seen subscribing to a host of IPOs in February.
Fund houses were also seen entering and exiting a host of midcap and smallcap stocks in the Budget month, data showed.
Industry-wise, RailTel Corp IPO (Rs 282.35 crore) was a hit among the mutual funds, followed by MTAR Tech (Rs 100.14 crore), Suryoday Small Finance Bank (Rs 60 crore), Heranba Industries (Rs 37.50 crore) and Nureca (Rs 9.82), data compiled by IDBI Capital showed.
SBI Mutual Fund, the largest fund house in terms of equity assets, subscribed to the MTAR Technologies IPO. The investment is worth Rs 70 crore at the current market price.
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Besides, the fund house bought Rs 243 crore worth shares in manufacturer of welding equipment maker Esab India and Rs 23 crore worth of shares in engineering solutions company Shreno. It also entered Sundaram Fasteners, Vodafone Idea and Dr Lal Pathlabs in smaller quantities.
SBI Mutual Fund, whose equity AUM grew 6.8 per cent in February, completely exited ABB Power (Rs 33 crore), Thyrocare Tech (Rs 28 crore), Tata Metaliks (Rs 11 crore) and Fairchem Organics (Rs 7.7 crore).
In all, the fund house, which manages equity assets worth Rs 2,62,437 crore, entered six new stocks while exiting four.
ICICI Prudential AMC, with Rs 1,57,529 crore in equity assets, also betted on RailTel IPO with a Rs 38 crore exposure. The fund house invested Rs 34 crore in the NYSE-listed Accenture and took some exposure to Wonderla Holidays and Solara Active Pharma.
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The fund house also sold small shares of Elgi Equipments, Precision Camshafts, Tejas Networks and BSE, among others, even as it entered four stocks and totally exited six others.
10 stocks that top mutual funds bought & sold in February
Portfolio reshuffle
As the equity assets under management (AUM) of mutual funds touched a new record high of Rs 10 lakh crore in February, money managers hiked allocation to stocks from sectors such as PSU banks, private banks, oil and gas, capital goods and utilities, and decreased weights in technology, auto, consumer, healthcare and telecom. With an allocation of 18.4 per cent in their portfolios, private banks were the top holding for mutual funds in February 2021, followed by technology (10.9 per cent), NBFCs (8.9 per cent), and oil & gas (7.2 per cent). Here is a list of 10 stocks that mutual funds bought and sold the most, according to a report by Motilal Oswal.
Tata Motors
Tata Motors, in which ace investor Rakesh Jhunjhunwala bought a stake last year, appeared to be the favourite of fund managers in February. Cumulatively, the holding of all mutual funds in Tata Motors went up by 13.3 per cent on a month-on-month basis. HDFC Mutual Fund bought 74,09,000 shares while Canara Robeco bought 40,00,000 shares of the Tata Group company. Several brokerages have maintained a bullish view on the automaker, citing sales recovery, improving margin, thrust on EVs, and its plans to turn debt-free by FY24.
IndusInd Bank
Mutual funds increased their holding in IndusInd Bank by 10.9 per cent, their second highest conviction bet in the month. Nippon India bought 18,98,000 shares of the blue chip, while UTI bought 257,000 shares and Invesco 11,40,000 shares. Last month, Morgan Stanley had retained its ‘overweight’ call on IndusInd Bank while global brokerage CLSA had recently maintained its bullish stance with a target price of Rs 1,325. In the last one year, the stock has gained about 55 per cent.
NTPC
Fund managers raised their bets by 3.8 per cent on NTPC during the month. At least four mutual fund houses have exposure of more than 2 per cent in the PSU stock. NTPC was the seventh largest investment for HDFC Mutual Fund that bought 1,87,06,000 shares of the power major in February. Other buyers include Nippon India, ICICI Prudential, Aditya Birla Sun Life and Franklin. In the last one month, the stock has gone up by over 11 per cent but has underperformed the benchmark indices in 1-year, 3-year and 5-year timeframes.
Eicher Motors
Eicher Motors, the maker of Royal Enfield bikes, was the third largest buy for mutual funds as their investment in the stock shot up by 3 per cent. Besides other fund houses, Tata Mutual Fund bought 376,000 shares of the auto stock that has been underperforming after its Q3 results. In the last 1 month, the stock has lost over 2 per cent of its market value.
HDFC Asset Management Company, which manages Rs 1,56,800 crore in equity assets, entered 10 stocks and exited 12 during the month. This fund house was seen subscribing to the IPOs of RailTel (Rs 70.6 crore) and Heranba Industries (Rs 22.50 crore). It also bought shares of SAIL (Rs 32 crore) and Sterlite Tech (Rs 26 crore) and took smaller exposures to Johnson Controls, Gujarat Gas and IGL.
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The fund house sold and exited Rain Industries (Rs 36 crore), Adani Enterprises (Rs 19 crore) and Orient Refractories (Rs 7 crore).
Other than the top three mutual fund houses, Axis Mutual Fund was seen subscribing to the IPOs of Suryoday Small Finance (Rs 60 crore) and MTAR (Rs 30.14 crore). Nippon India had a Rs 127 crore exposure to RailTel IPO.
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