Equity mutual funds' shopping for stocks continues

During the Oct-Dec quarter, fund managers had deployed over Rs 30,000 crore in stocks

India’s equity mutual fund (MF) managers have bought stocks worth Rs 4,079 crore so far this month, from data issued by the Securities and Exchange Board of India.

In December, they'd pumped in Rs 9,200 crore, despite weak market sentiment. Despite this, they carried forward into January a cash position of nearly Rs 20,000 crore in their combined portfolios.

According to fund managers, the stocks chased the most in January include State Bank of India (SBI), ICICI Bank, Tata Motors, YES Bank and Larsen & Toubro.

“We have been buying and have restrained a bit over the past few days. Inflows are good and we also have good cash availability to deploy. SBI was our main buy pick and recently from the private banking space, we have added Axis Bank. Given the possibility of global uncertainty, fund managers are sticking to large-cap quality names,” said the equity head of a mid-size fund house.

During the December quarter, fund managers had put Rs 30,000 crore in stocks. Compared with that, the start of 2017 looks a bit weak. However, fund managers add, the figure does not include investment in the CPSE Exchange Traded Fund (ETF) and in the BSE exchange's initial public offer.

“We, along with several other fund houses, have invested in the CPSE ETF and the IPO of BSE. I believe nearly Rs 1,000 crore should have gone for these issues from the industry players," said the chief executive of a large fund house. Business Standard could not independently ascertain the investment figures in fresh issuances.

Since the start of FY15, inflows in the equity segment of MFs have been robust. Nearly Rs 2 lakh crore of fresh money has found its way into equity MF schemes during this period. So, fund managers never ran short of money to deploy and whenever stocks fell, they used the opportunity for heavy buying.

There are a little over 450 equity related schemes offered by the sector, which collectively manage assets worth about Rs 5 lakh crore.