RIL, Infosys, Airtel: MFs trim stake in index heavyweights in January

Reliance Industries, Infosys, Bharti Airtel, Power Grid and Tata Consultancy Services are some of the stocks mutual funds cashed out of last month

As part of their portfolio rejig exercise, mutual funds trimmed stake in index heavyweights in January while they lapped up fresh share sales by all the three companies that came out with initial public offerings (IPOs) during the month, reports suggest.

Among stocks, Reliance Industries (RIL), Infosys, Bharti Airtel, Power Grid and Tata Consultancy Services (TCS) are some of the stocks mutual funds cashed out of, a recent report by Edelweiss Securities said.

The selling in the shares comes on the back of a strong rebound in these stocks since March 2020 low. However, in January 2021 shares of most of these firms put up a weak show wherein RIL shed the most, down 7 per cent followed by Power Grid that dipped nearly 3 per cent and Infosys that lost only 1 per cent. During the same period, NSE barometer Nifty dropped 2.5 per cent, ACE Equity data show.

Shares of Tata Consultancy Services and Airtel, however, added over 8 per cent each.

While mutual funds were net sellers in telecom major Bharti Airtel, foreign institutional investors (FIIs) increased their stake in the Sunil Mittal-controlled firm in the same month. FIIs will further add Bharti Airtel in their portfolio, resulting in fresh flows of $700 million in the firm in February due to MSCI increasing weight in the stock, reports say.

"Bharti Airtel continues to report resilient numbers, especially on Indian wireless business front. We see the favourable industry structure of three players (two being strong), a good enough kicker for an eventual hike in tariff as well as superior digital play in medium to long term. We maintain our BUY rating on the stock with a revised DCF based target price of Rs 730," analysts at ICICI Securities said in a note post Airtel's Q3 numbers.

Source: Edelweiss Alternative Research, ACE MF

 

Blue-chips in demand

Among other top shares that mutual funds picked up in January were HCL Technologies, Axis Bank, Asian Paints and Larsen & Toubro (L&T).

Source: Edelweiss Alternative Research, ACE MF

 

While Axis Bank and L&T have posted a strong performance last month, logging gains of 6 per cent and 3 per cent, respectively, Asian Paints and HCL Tech shares have fallen up to 12 per cent.

According to the publically available Reuters data, a consensus estimate of 33 analysts has a BUY call on L&T. Analysts believe its strong order book and government focus of Atmanirbhar Bharat along with the Capex plan bode well for the stock.