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H D F C 2741.70 (-4.40%)
HCL Technologies 1110.05 (-1.31%)
HDFC Bank 1489.90 (-2.36%)
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Wipro 621.45 (-2.40%)

Which large cap stocks are mutual funds buying?

by 5paisa Research Team 18/12/0021

Indian stock indices are consolidating near their peak levels and have seen a rush of money towards large cap counters as investors, anticipating a correction, are looking at a comfort factor rather than make riskier bets.

While foreign portfolio investors (FPIs) or foreign institutional investors (FIIs) have been the driver of local bourses historically, domestic mutual funds have become very significant in the last few years given the rush of local liquidity. So much so that the current bull run is largely attributed to the flow of cash into domestic mutual funds, which have pumped in a massive amount of money into the stock market.

Although most local fund managers have been voicing concerns about valuations, quarterly shareholding data shows they pushed up their holding in over 200 listed companies. Of those, they increased their stake by two percentage points or more in around 18% of the companies.

In particular, they hiked stake in as many as 129 companies (as against 89 companies for FIIs) that have a valuation of $1 billion or more last quarter. Of these 129 companies, 74—or more than half—were large cap companies.

Mutual fund managers were bullish on top private-sector banks, FMCG companies, automobile and auto component makers, engineering, select financial services counters, and the Adani group pack, among others.

This is in contrast to FIIs, who were bullish on selective FMCG stocks, PSU banks besides gas and power companies, pharmaceutical and engineering companies, life insurers and a few automakers.

Top large caps that saw MF buying

If we look at the pack of large caps with a market valuation of Rs 20,000 crore ($2.6 billion) or more, then MFs pushed up their stake in HDFC Bank, ICICI Bank, HDFC, Bajaj Finance, HCL Technologies, ITC, Bajaj Finserv, Larsen & Toubro, Axis Bank, ONGC, Adani Enterprises, Tata Motors and Adani Ports.

HDFC Life Insurance, Power Grid, Pidilite, SBI Life Insurance, M&M, Bajaj Auto, SBI Cards, Godrej Consumer, InterGlobe Aviation, Britannia and Apollo Hospitals also saw domestic mutual funds pick up additional shares.

Further lower down the order, Mindtree, Ambuja Cements, IndusInd Bank, Motherson Sumi, Marico, United Spirits, GAIL, Piramal Enterprises, UPL, Bajaj Holdings, Hero MotoCorp and Jubilant Foodworks also saw buying activity by local fund managers.

Some large caps which saw buying from both foreign and domestic fund managers include HDFC Life Insurance, Marico, GAIL, Piramal Enterprises, Canara Bank, Varun Beverages and Dalmia Bharat.

Meanwhile, mutual funds picked up 2% or more additional stake last quarter in around ten large caps. This pack includes Clean Science & Tech, Coforge, Indraprastha Gas, Ashok Leyland, Bata, SBI Life Insurance, Godrej Consumer, Minda Industries, Escorts and Sona BLW.

Clean Science & Tech had also seen significant stake purchase by FIIs.

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Natco Pharma launches two new cancer treatment tablets in India and US markets

Natco Pharma launches two new cancer treatment tablets in India and US markets
by 5paisa Research Team 18/11/2021

Both these tablets are antineoplastic drugs used in the treatment of certain types of cancers.

Natco Pharma Ltd, a multinational pharmaceutical company headquartered in Hyderabad, announced today the launch of Tipanat tablets, a novel antineoplastic nucleoside analogue used in the treatment of advanced colorectal and gastric cancer, which affects approximately 1,25,000 people every year in India.

The Tipanat tablet is a brand new fixed-dose combination of Trifluridine and Tipiracil, that has been launched for the first time in India. Owing to its usefulness in extending survival as well as preserving the quality of life in the late lines of treatment, Tipanat is a very significant launch.

Moreover, in collaboration with its marketing partner Breckenridge Pharmaceutical Inc., the company also announced the launch of Everolimus Tablet, an antineoplastic chemotherapy drug in the US markets. These tablets are available in the 10 mg strength and are a generic version of Afinitor.

On the addressable market front, as per the industry sales statistics, in 1 year ending July 2021, Afinitor tablets of 10 mg strength generated annual sales of USD 392 million. Before the launch of Everolimus Tablets in 10 mg strength, Natco Pharma, along with Breckenridge Pharmaceutical Inc., had also launched the same tablet in 2.5mg, 5mg and 7.5mg strengths during the first quarter of 2021 in the US markets.

Talking about the company’s financials, in the recent quarter Q2 FY22, on a consolidated basis, the net sales stood at Rs 377.20. The PBIDT (ex OI) came in at Rs 70.5 crore, whereas its corresponding margin stood at 18.69%. Lastly, the company’s net profit came in at Rs 65.10 crore, and its corresponding margin stood at 17.26%.

At the closing bell on Thursday, the stock price of Natco Pharma Ltd was trading at Rs 814.65, a decline of 0.81% from the previous day’s closing price of Rs 821.30 on BSE.

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These stocks see huge volume burst in the last leg of the trading session!

These stocks see huge volume burst in the last leg of the trading session!
by 5paisa Research Team 18/11/2021

Bluestar Company, Bombay Stock Exchange and Dhani Services have witnessed volume burst in the last 75 minutes of the trade.

As the saying goes, the first and the last hour of each trading session is the most important and active in terms of price and volume. More so, the activity in the last hour is said to be of utmost importance because most of the pro traders and institutions are active at this time. Hence, when a stock sees a good spike in volume in the last leg of trade along with price rise it is said to be the pro and institutions have a keen interest in the stock. Market participants should keep a close watch on these stocks as they can witness good momentum in the short-medium term.

So, based on this principle we have shortlisted three stocks, which have witnessed volume burst in the last leg of trade along with price rise.

Bluestar Company: The stock gained a healthy 3.67% on Thursday. The stock traded positive throughout the day, but the last 75 minutes witnessed a volatile move as it shot up 3.6% before retracting a little. Above average volumes were recorded towards the end of the trading session as the stock made volatile moves. It now trades near an all-time high and has a higher probability of breaking out. The stock can be on the trading radar for days to come.

Bombay Stock Exchange:  The stock closed at a record high and up 2.78% on the trading session that ended Thursday. It traded weakly during the initial hours but saw momentum in the latter half of the session. The volume witnessed in the last 75 minutes was almost half the day’s volume. It would be interesting to see how the stock performs at its all-time high level. 

Dhani Services: Dhani rose nearly 5% on Thursday with good volumes. It is trading weak for many months as it looks to build momentum. The stock experienced a stupendous move of 7% in the last 75 minutes suggesting institutional activity taking place. 60% of the total daily volume was recorded during this period. It will be worth seeing how the stock performs in the next trading session.

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All you want to know about Vedanta’s plan to restructure, demerge key businesses

by 5paisa Research Team 18/11/2021

Mining and energy conglomerate Vedanta Ltd could soon list its three main arms—the oil and gas division, aluminium division and steel division—after it has carved them out as separate entities. 

This move, Vedanta said, will help unlock value and simplify the group structure. 

“Considering the scale, nature, and potential opportunities for various business verticals of the company, it should undertake a comprehensive review of the corporate structure and evaluate a full range of options and alternatives (including demergers, spin-offs, strategic partnerships, etc.,) for unlocking value and simplification of corporate structure,” the company said.

What has Vedanta done about its proposed plan so far?

The company has appointed a committee of directors to look into the proposed demerger of businesses and a separate listing of each one of them, it said in a stock exchange filing. 

What did Vedanta’s promoter Anil Agarwal say about the proposed move?

Agarwal told the Press Trust of India that following the restructuring of the group, the three businesses carved out of the company will operate parallelly. 

“All the three businesses have great potential for growth, and we think the model being evaluated will provide natural avenues for growth as well as enhance shareholder value,” he said.

“Over the past few years, the group has materially improved the operational performance of the businesses, increased cash flows, reduced debt whilst concomitantly focusing on accelerating investments in energy transition, health and safety, diversity and ESG (environmental, social, and governance) in general,” Agarwal said. 

Agarwal added that the move was intended to create independent, industry-leading, global public companies, where each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees.

But isn’t this a U-turn of sorts? Wasn’t Vedanta looking to delist from the exchanges?

Yes, this is indeed a U-turn of sorts. In October last year, Vedanta’s promoter family led by Agarwal wanted to take the listed group company private. But the plan failed as non-promoter shareholders did not tender the requisite shares needed to let the company delist from the Indian exchanges. 

So, why did Agarwal want to take Vedanta private in the first place?

Vedanta’s promoter family wanted to take the company private as doing so would have allowed them to use its surplus cash and its dividends to cut the debt of the holding company. 

What do analysts have to say about the proposed move?

Analysts seem to be buying into Agarwal’s idea. Deven Choksey, managing director, KR Choksey Shares and Securities Ltd, told the Mint newspaper that since Vedanta is an integrated player, with both ferrous and non-ferrous businesses, it made sense to separate the businesses to unlock value.

“Currently, high metals and commodity prices are not getting reflected in the company’s business largely due to the integrated manufacturing they are doing,” he added. 

How did the Vedanta counter perform on Thursday?

The share market, however, appears not to have taken too kindly to the news as the counter was down 8.5% at close of trade on Thursday.

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What is the difference between Flexi-cap funds and Multi-cap funds?

What is the difference between Flexi-cap funds and Multi-cap funds?
by 5paisa Research Team 18/11/2021

Various schemes offer diversification within equity markets, out of which, we are going to focus on Flexi-cap funds in this article.

Presently, people are getting aware of the fact that investing is an essential aspect of every individual life. As for investing aid, you create a fund to fulfil various life goals. While formulating one’s portfolio he/she should make sure that diversification is the key aspect to receive optimal benefits.

Flexi-cap funds are equity-oriented mutual funds, which invest in stocks of the companies across the different market capitalisation such as large-cap, mid-cap, and small-cap. Flexi-cap funds allow investors to diversify their portfolio across sectors as well as market capitalisation, which mitigates risk as compared to small-cap funds and mid-cap funds. Fund managers assess the growth potential of companies, irrespective of their sizes, and invest the corpus of investors in the same, unlike small-cap funds, mid-cap funds, and large-cap funds, which are focussed on the company’s market capitalisation. Fund managers can shift between different sectors and companies, as & when required. If in case, any particular sector or market cap category such as large-cap isn’t doing well while mid-cap is expected to do better going forward, then fund managers will adjust their portfolio accordingly to capture the future growth.

Flexi-cap funds are quite similar to multi-cap funds in the way they invest across the market capitalisation but differ in the proportion of funds invested in each of the market capitalisations. In the case of multi-cap funds, SEBI has mandated a minimum of 75% of the total assets towards equity and equity-related instruments and a minimum of 25% of allocation towards small-cap and mid-cap stocks each. On the other hand, Flexi-cap funds have to put 65% of the total assets towards equity and equity-related instruments and there is no pre-defined proportion to invest in small-cap, mid-cap, or large-cap stocks. Due to this benefit in Flexi-cap funds, many AMCs recategorised the multi-cap funds to Flexi-cap funds.

Who should consider investing these funds?

  • Investors, who are ready to invest their money for at least 5 years, should consider investing in these funds.

  • Flexi-cap funds come under the high-risk category; so, investors should assess their risk appetite, needs and goals and then decide to invest.

  • Ideally, investors willing to diversify their portfolios across various sectors and market capitalisation to earn an optimal return should invest in these funds.

The following table depicts one-year return returns of the top five funds offering Flexi-cap funds based on AUMs: 

Fund Name  

1-Year Return (%)  

AUM (in crores)  

PGIM India Flexi Cap Fund  

66.70  

2,957.48  

BOI AXA Flexi Cap Fund  

62.09  

162.23  

Franklin India Flexi Cap Fund  

59.08  

10,612.25  

Parag Parikh Flexi Cap Fund  

57.54  

18,495.88  

HDFC Flexi Cap Fund  

57.50  

27,563.63  

 

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F&O Cues: Key support & resistance levels for Nifty 50

F&O Cues: Key support & resistance levels for Nifty 50
by 5paisa Research Team 18/11/2021

Today the Nifty F&O action for November 25 expiry shows strong resistance at 18,000.

Today Indian equity market hit a hattrick in terms of closing in the red. The frontline equity indices traded in the green for the first 30 minutes, however, soon it lost ground and traded in red for the entire day. Selling was intensified in last half an hour. Doctor Copper is currently trading at a five-month low, which is casting doubt on global economic growth going ahead and in turn, is weighing on the equity market.

Activity in the F&O market for the weekly expiry on November 25, 2021, shows that resistance has come down to 18,000. The highest call option open interest (115637) for Nifty 50 stood at a strike price of 18,000. In terms of the highest addition of open interest in the call options front, it was at 18,000 in the last trading session. A total of 71,758 open interest was added at this strike price. The next highest call option open interest stands at 18,500 where total open interest stood at 81,959.

In terms of put activity, the highest put writing was seen at a strike price of 17,300 (23,132 open interest added on November 18), followed by 17,000 (20,049 open interest added on November 18). The highest put open interest unwinding was seen at a strike price of 18,000 (5911 open interest shed on November 18).

Highest total put open interest (61,284) stood at a strike price of 17,500. This is followed by a strike price of 17,400, which saw a total put option open interest of 57,890 contracts.

Following table shows the difference between call and put options at strike price near to max pain of 17800.

Strike Price  

Open Interest (Call option)  

Open Interest (Put option)  

Diff(Put – Call)  

17,500.00  

11768  

61284  

49516  

17,600.00  

4523  

36933  

32410  

17,700.00  

19205  

40078  

20873  

17800  

52376  

49392  

-2984  

17,900.00  

70189  

25520  

-44669  

18,000.00  

115637  

34048  

-81589  

18,100.00  

59462  

12299  

-47163  

  

The Nifty 50 put call ratio (PCR) closed at 0.68 compared to 0.56  in the previous trading session. A PCR above 1 is considered bullish while a PCR below 1 is considered bearish. 

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