Mutual funds liquidity flowed to bluechips in May amid market volatility

Mutual funds boosted exposure to ICICI Bank, HDFC Bank and Reliance in May, investing over ₹24,000 crore as market volatility created buying opportunities

Select stocks cornered the bulk of the equity market investments made by mutual funds (MFs) in May. Three bluechip stocks — ICICI Bank, HDFC Bank, and Reliance Industries — emerged as the most bought stocks as fund managers stepped up purchases during a fresh bout of market volatility that pushed their share prices closer to near-term lows. MFs deployed a net ₹24,202 crore into the three stocks in May.

 

The fresh investments have strengthened mutual funds’ exposure to their three largest holdings. According to Prime Database, HDFC Bank, ICICI Bank and Reliance Industries together account for nearly 14 per cent of the industry’s equity assets under management (AUM). 

The other two stocks among the top five were Lenskart Solutions and Billionbrains Garage Ventures (Groww), both of which witnessed large block deals in May following the expiry of post-IPO lock-in restrictions. MFs acquired a net ₹6,154 crore worth of stake in the two new-age companies last month. MFs were among the buyers in both the block deals. JSW Energy, HDFC Life Insurance, Eternal, Adani Enterprises and Hyundai Motor were also in demand last month. 

On the sell side, two major IT stocks — Wipro and Infosys — along with Multi Commodity Exchange of India (MCX) made up the top three. MFs pulled out nearly ₹7,000 crore from these three stocks. GE Vernova and Lupin also witnessed heightened MF selling.