Check out the large cap stocks that mutual funds bought in Jan-March
Indian stock indices had corrected sharply earlier this month but have gained back some of the lost ground in the last one week.
While foreign portfolio investors (FPIs) or foreign institutional investors (FIIs) have been the driver of local bourses historically, mutual funds (MFs) have also become significant in the last few years given the rush of local liquidity. So much so that the bull run of 2020 and 2021 is largely attributed to the flow of cash into the domestic mutual funds, who have in turn pumped in money into the stock market.
While most local fund managers have been voicing concerns about the state of valuations, quarterly shareholding data shows they pushed up their holding in hundreds of listed companies.
In particular, MFs hiked stake in as many as 118 companies that have a valuation of $1 billion or more last quarter, compared with 108 companies in the quarter ended December 31, 2021 and 129 companies in the quarter ended September.
Of these, 80 were large-cap companies, compared with 58 large caps where MFs pushed up their holding in the three months ended December 31 and 74 such companies in the quarter ended September 30.
Mutual fund managers were bullish on top private sector banks, large software service companies, cement producers, selective FMCG and drugmakers, life insurers, engineering companies and selective financial services counters, among others.
Top large caps that saw MF buying
If we look at the pack of large caps with market valuation of Rs 20,000 crore ($2.6 billion) or more, then MFs pushed up their stake in HDFC Bank, Infosys, Hindustan Unilever, ICICI Bank, HDFC, Kotak Mahindra Bank, Bajaj Finance, HCL Tech, Wipro, L&T, Maruti Suzuki, UltraTech Cement, HDFC Life Insurance, M&M, Vedanta, Coal India and SBI Life Insurance.
Among others, Tech Mahindra, Cipla, DLF, Godrej Consumer, Havells, SBI Cards, Eicher Motors, IndusInd Bank, Ambuja Cements, L&T Info, Dr Reddy’s Labs, Indigo, GAIL, HAL and Bank of Baroda, also saw domestic mutual funds pick up additional shares.
Several of these companies were also among the MF picks in the previous quarter. These include HDFC Bank, Infosys, ICICI Bank, HCL Tech, Wipro, L&T, UltraTech Cement, SBI Life Insurance, M&M and L&T Infotech.
Meanwhile, in 11 large caps mutual funds picked up 2% or more additional stake last quarter. This pack includes Coforge, Indian Hotels, Bharat Forge, Zee Entertainment, Max Financial, Lupin, Tata Communications, Jubilant Foodworks, Bandhan Bank, IPCA Labs and Cummins India.
Zee Entertainment, IPCA Labs, Bharat Forge and Max Financial Services were also companies where MFs had hiked stake by 2% or more in the previous quarter. This shows they are very bullish on these four counters.
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