Mutual funds sell 25% in Paytm holding, continue to lap up HDFC Bank

Reliance Industries along with HDFC Bank remain the top mutual funds buys for 2nd straight month

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Mutual funds (MFs) offloaded around 25 per cent of their holdings in One97 Communications (Paytm) after the Reserve Bank of India's (RBI’s) action against Paytm Payments Bank.

MFs held around 32.8 million Paytm shares at the end of February. This is down 26 per cent from the January tally of 44.5 million, shows a report of Nuvama Alternative & Quantitative Research. 

The value of total holdings, which also includes exposure to passive funds, is Rs 1,212 crore (at current prices). In February, Paytm's share price almost halved due to the RBI action.

On January 31, the banking regulator had placed restrictions on Paytm Payments Bank, citing non-compliance and supervisory concerns.

 

MFs also brought down their exposure to Zee Entertainment. The company, which is also grappling with regulatory issues, saw MF exposure decline by 7.1 million shares. Sundaram MF and Franklin Templeton MF completely exited the stock.
 

On the buying side, HDFC Bank and Reliance Industries attracted the highest MF investments for the second consecutive month.

MFs have invested over Rs 21,000 crore in HDFC Bank during the January-February period. They were net sellers in the banking major during the previous two months.

 

Investments in Reliance shares amounted to Rs 3,760 crore last month, the report stated.

The list of most-bought and sold stocks shows a churn in banking sector stocks, on an aggregate basis.

While HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, and Axis Bank feature in the top-20 buy list, banks such as Punjab National Bank, ICICI Bank, State Bank of India, Bandhan Bank and Canara Bank were among the top-20 most-sold stocks.