Mutual funds pare holdings in Adani Group stocks in February, shows data

Three group companies feature in list of most-sold large-cap stocks

Fund managers pruned their exposure to crisis-hit Adani Group stocks amid an unprecedented sell-off triggered by a report by US-based Hindenburg Research. Adani Ports and Special Economic Zone topped the list of most-sold large-cap stocks by domestic mutual funds in February.

Ambuja Cements and Adani Enterprises were also among the top five large-cap companies that witnessed selling by MFs.

A report by ICICI Direct shows that MF holding in Adani Ports fell by 28 per cent month-on-month in terms of number of shares. The value of the holdings, meanwhile, was down over 30 per cent. In the case of Ambuja Cements and Adani Enterprises, the number of shares held by MFs was down 19 per cent and 15 per cent, respectively.

According to the brokerage, almost 98 per cent of change in MFs’ Adani Group exposure in February was a result of changes in active portfolios.

Quant MF, which had the highest non-hedged active exposure to Adani Group stocks at the end of January, offloaded the highest number of Adani Ports shares among MFs last month at 8.2 million. According to its February-end factsheet, it sold off its complete holdings in Adani Group companies last month.

Before the Hindenburg report came to the fore in January, MFs had an exposure of 0.64 per cent to Adani Group companies, according to a report by Fisdom. A part of it (0.18 per cent) was through passive funds, where the fund manager has no option but to invest in stocks that are part of the index. Even a part of the active exposure was hedged by MFs through the use of arbitrage strategy.

The Fisdom report showed that Kotak MF and SBI MF had hedged almost 90 per cent of their Adani Group holdings of around Rs 2,000 crore each (as of December 31, 2022). Quant MF had the highest non-hedged active exposure to the stocks at Rs 1,276 crore at the end of December.

Data shared by ICICI Direct showed that SBI MF and Kotak MF were the other major sellers of Adani Ports. Their holdings reduced by around 3.8 million shares each.

The large-cap stocks that were bought the most in February included InterGlobe Aviation, GAIL, Macrotech Developers, Tata Motors, Tech Mahindra, LTIMindtree, Dabur India, Info Edge, Havells India, and Hindustan Zinc.