India’s equity fund managers went all out buying in August. Backed by robust investor flows, equity mutual funds
(MFs) used market weakness as an opportunity to deploy more cash. Power utility NTPC
topped the most-bought list.
The Centre has divested shares worth Rs 9,000 crore as part of the 2017-18 disinvestment programme. It appears that MFs cornered a third of the shares. Other top picks included HDFC, Infosys and Sun Pharmaceutical Industries. ICICI Prudential MF, Aditya Birla Sun Life MF
and DSP BlackRock MF
were seen lapping up shares of mortgage loan provider HDFC.
Sun Pharma emerged as a value pick. The top 10 stocks saw investment of Rs 10,575 crore from MFs in August. Tech Mahindra, Grasim and Reliance Capital emerged as the most-sold stocks by fund managers. HDFC MF reduced exposure to Adani Ports & SEZ. Wipro, too, witnessed selling by fund managers.
Given the existing cash pile-up with fund managers, any correction in the market or steep corrections in individual stocks could trigger MF buying, going forward. In August, the benchmark indices had come off as much as 4% from their peak. Chandan Kishore Kant takes a look: