Are MFs gradually picking up Tata stocks after Chandra appointment?

Tata Sons Board voted to remove Cyrus Mistry from the Chairmanship of Tata Sons on 24 October, 2016. After a knee-jerk reaction by mutual funds that were negative about the Tata group stocks post the replacement of Cyrus Mistry as the Chairman, they however, in the subsequent months started adding Tata Group stocks (except Tata Power) in their portfolios, Morningstar data show.

With Natarajan Chandrasekaran’s appointment as the Chairman of Tata Sons, mutual funds offloaded their stakes in TCS, Tata Motors and Tata Power in January 2017, data show.

In October and November, mutual funds bought Tata Motors, but pared exposure in the subsequent two months as demonetisation impacted sales growth. However, Tata Motors DVR remained popular, and funds increased exposure in the stock.

Buying was also visible in activity in Tata Steel. The pace of increase, according to Morningstar, has been steady all though the year, as mutual funds gained comfort from the steady metal prices.

In the last two months, Tata Power has witnessed biggest drop in the mutual fund holding after seeing an increase in the stake for last seven consecutive months, the Morningstar report says. In January 2017, the stock holding dropped by 115-lakh shares, which resulted in 15.39% decrease in the shares held by the mutual funds.

Source: Morningstar report