Mutual funds sell several blue chips stocks, buy mid-caps in March

The benchmark indices had gained nearly 8% amid a surge in foreign institutional investor flows last month

Domestic money managers were seen pruning their holdings in several blue-chip stocks, including Reliance Industries (RIL) and Housing Development Finance Corp (HDFC), in March. On the other hand, they were seen nibbling in several mid-caps such as Jubilant Foodworks, Sheela Foam and Relaxo Footwears. 

The benchmark indices had gained nearly 8 per cent amid a surge in foreign institutional investor (FII) flows last month. It is pertinent to note that while FIIs pumped in Rs 42,500 crore into domestic equities, mutual fund (MFs) took nearly Rs 8,000 crore off the table last month. “Domestic fund managers indulged in contrarian investing. They booked profits in several large-caps stocks, taking advantage of the strong momentum. MFs also bought shares of several companies that had lost favour,” said an industry expert.

Among the top sells by domestic fund managers were RIL (total amount divested Rs 977 crore), HDFC (Rs 618 crore) and Bajaj Finance (Rs 602 crore). Most of these stocks rallied despite the sell-off by MFs as overseas investors were big buyers in the counters. Meanwhile, MFs shifted focus to mid-caps pumping in more than Rs 300 crore each in half a dozen stocks in the mid-cap space, including Aarti Industries.