Mutual funds cut flab in RIL, Airtel to bet on blue chips in August

Equity mutual funds (MFs) pared their holdings in bluechip stocks such as Reliance Industries, Infosys and Tata Consultancy Services (TCS), in August, amid strong inflows from foreign portfolio investors (FPIs).

Last month, MFs turned net-sellers for the first time in 17 months, selling shares worth Rs 1,200 crore. On the other hand, FPIs bought shares worth Rs 51,204 crore. FPIs were net sellers from October 2021 to June 2022. They had dumped stocks worth Rs 3 trillion during this period.

Industry players said domestic funds decided to book profits on valuation concerns around strong influx of foreign flows. They sold shares worth Rs 2,030 crore of RIL, Rs 1,950 crore of Bharti Airtel and Rs 1,120 crore of Infosys. HDFC Life Insurance (Rs 1,080 crore) and TCS (Rs 1,080 crore) were the other two stocks that saw selling of more than Rs 1,000 crore.

Typically, MFs step up buying when FPIs sell and go slow when FPIs buy.

 

Meanwhile, auto ancillary firm Sona BLW Precision Forgings was the most bought stocks by MFs in August, attracting an investment of nearly Rs 1,900 crore. MFs picked up a partial stake divested by private equity major Blackstone in the company.

State-owned NTPC was the second-most bought stock (net buying worth Rs 948 crore) followed by Kotak Mahindra Bank (Rs 850 crore).

In the midcap space, apart from Sona BLW, Max Healthcare (Rs 760 crore), NMDC (Rs 600 crore), and Gland Pharma (Rs 460 crore) were the most bought stocks.

Meanwhile, Rolex Rings (Rs 460 crore), Kirl Pneumatic (Rs 240 crore) and Syrma SGS Tech (Rs 180 crore) saw the highest inflows among small caps. Meanwhile, Kirloskar Oil (Rs 170 crore), Granules India (Rs 120 crore), VIP Industries (Rs 90 crore) saw the biggest outflows in the small-cap universe.