TCS bet reaps healthy rewards
Investors who bought shares of Tata Consultancy Services (TCS) from promoter Tata Sons last month have made handsome gains. Shares of the technology major are up over 18 per cent since March 13, when Tata Sons sold 1.5 per cent stake, worth Rs 81.3 billion, in TCS to a clutch of institutional investors. According to shareholding data, HDFC Mutual Fund (MF), ICICI Prudential MF and Royal Bank of Canada are some investors who increased their holdings in the firm in the past month. The reward, however, hasn’t come without a scare, as TCS shares had plunged five per cent after the promoter pared its holding from 73.6 per cent to 71.9 per cent.
NAV management is new trend
Given the uncertainty around the stock market, mutual fund managers are facing a new headache – where to invest the steady inflows from retail investors. Some have found have found a way out by adding to the same stockd that they hold in their portfolio. For example, if a fund house already has an exposure of Rs 10 billion in a particular stock, the fund manager would buy another Rs 10 billion in it. “This will ensure that even if the market falls, prices of these stocks won’t go down too much due to lack of float. This is a typical example of net asset value (NAV) management by some fund managers,” says an industry veteran.
More cream in Parag Milk Foods stock
Parag Milk Foods shares jumped 20 per cent in the past week amid news that the dairy company was buying Danone’s plant in India. Brokerages are turning positive on Parag stating that the acquisition would help it establish a presence in north India. Currently, half of the brokerages tracking the stock have a buy call while 33 per cent are neutral. Many institutional investors are also adding shares of Parag Milk as a play on the domestic consumption theme.