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Home > Business > Special

What's hot, what's not with mutual funds?

March 13, 2007

Mutual funds were predominantly buyers in the banking, engineering, power, IT, and media space in February. Cement, construction, manufacturing, auto, chemical, and oil and gas stocks weighed heavy on their sell list, while stocks were re-aligned in the FMCG, and metal pack.

Equity IPOs hot with Mutual Funds:

Equity IPOs boughtNo. of Shares
Power Finance Corp18,226,049
Firstsource Solutions5,168,001
Redington (India)721,248
Global Broadcast News384,403
Cinemax India135,873
C and C Constuctions131,089
Technocraft Industries101,867
Akruti Nirman60,978

A study of the top ten mutual funds' equity portfolios as on February 28, which are Prudential ICICI, Reliance, UTI, HDFC, Templeton, Birla SunLife, SBI, Tata, DSP ML, and Standard Chartered Mutual Fund reveals that funds continued to buy huge chunks of engineering stock KEC Infrastructures, while further diluted their exposure to aluminium major Hindalco, and cement pivotal Gujarat Ambuja Cement.

MFs also joined the IPO party in a big way with Power Finance Corporation, and Firstsource Solutions being the most favourite ones.

 In terms of value, TCS, ICICI Bank, and Power Finance Corporation were the top purchases by MFs, while L&T, Hindalco, and Jaiprakash Associates topped the sell list.


Stocks and Sectors that attracted Funds:

Top shares traded by MFs                       (based on volume)
Top 5 shares boughtNo. of Shares
KEC Infrastructures19,035,641
Power Finance Corp18,226,049
Steel Authority of India8,897,340
Top 5 shares soldNo. of Shares
Hindalco Industries14,206,379
Gujarat Ambuja Cements10,395,870
Indian Hotels Company6,530,973
Exide Industries5,718,188
TVS Motor Company4,524,802

Among the IPOs that listed in February, Power Finance Corporation was the most favourite pick with nine of the top 10 MFs purchasing over 182 lakh shares of stock. Templeton MF was the top buyer with over 66 lakh shares bought. However, none of the equity schemes of Pru ICICI MF invested in the stock.

Six of the top 10 fund houses invested in the software stock Firstsource Solutions purchasing over 51.6 lakh shares. Pru ICICI MF was the top investor in the IPO with a total of over 37.7 lakh shares bought.

 Templeton, DSP ML, UTI, HDFC, and Tata MF were the other funds that invested in Firstsource IPO.

DSP ML, SBI, Stanchart, and Birla MF together bought over 7 lakh shares of software stock Redington (India), while a total of over 3.8 lakh shares of media company Global Broadcast News IPO were purchased by Pru ICICI, DSP ML, Stanchart, and Templeton MF.

Cinemax India, C and C Constuctions, Technocraft Industries (India), and Akruti Nirman were among the other IPOs that found place in the mutual fund portfolio, while Cambridge Technology Enterprises, Pochiraju Industries, House of Pearl Fashions, Transwarranty Finance, and SMS Pharmaceuticals failed to attract funds.

KEC Infrastructures - the top bought stock was purchased by four out of the top ten funds. DSP ML MF was the top buyer of the stock with over 89.7 lakh shares bought. SBI, Tata, and Reliance MF also added to its investments in the stock, while HDFC MF pared exposure to it.

Among other engineering stocks, Cummins India, Crompton Greaves, Manugraph Industries, Siemens, and Suzlon Energy were among the top 50 buys, while L&T was among the top sells.

Hindalco, the top sell was sold by seven of the top 10 funds, while Templeton MF bought it. Pru ICICI MF with over 63.5 lakh shares sold was the top seller in the.

Top shares traded by MFs                       (based on value)
Top 5 shares boughtValue (Rs in cr)
Tata Consultancy Serv510.87
ICICI Bank266.35
Power Finance Corp202.13
Zee Entertainment Entp168.38
Reliance Energy152.92
Top 5 shares soldValue (Rs in cr)
Larsen and Toubro229.12
Hindalco Industries198.39
Jaiprakash Associates192.77
Tata Steel180.54
Grasim Industries125.14

Among other metal stocks, Tata Steel, and Sterlite Industries were sold, but they bought Sail, Jindal Stainless, and Welspun Gujarat.

IT major TCS, the top bought stock in terms of value was bought by nine MFs. Pru ICICI MF was the top buyer with over 17.6 lakh shares bought.

Other IT stocks Satyam, Cambridge Solutions, Infosys, and Wipro also attracted MFs, while Hexaware, Cranes Software, Rolta, and Patni Computer were sold.

Among other sector, banking stocks IDFC, ICICI Bank, Centurion Bank, PNB, Indian Bank, Federal Bank, HDFC Bank, and Development Credit Bank were bought, while Karnataka Bank, and IDBI were sold.

Buying was also seen in media stocks Zee Entertainment, Zee News, TV Today, and HT Media, while Wire and Wireless was sold. Power pivotals Reliance Energy, NTPC, and GVK Power too were bought.

Cement and construction stocks Gujarat Ambuja, Japrakash Associates, Gammon, IVRCL, ACC, IVRCL, JK Cement, Nitco Tiles figured among the top 50 sells, while Prism Cement, Nagarjuna Construction, HCC, and India Cements were among the top 50 buys.

Heavy selling was also seen in oil and gas majors ONGC, HPCL, and Cairn India. In the manufacturing sector, Arvind Mills, Ballarpur Industries, SRF, Vardhman Holdings, Raymond, and Alok Industries were sold.

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