Even if foreign institutional investors take a breather in September, the markets may not mind if one goes by the purchasing power of domestic mutual funds.
Mutual funds should easily be able to make about Rs 3,000-odd crore (Rs 30 billion) of purchases, considering the collections by the recently launched equity funds.
The amount will be significantly higher if one considers the cash levels in existing mutual funds, especially the recently launched ones that have not completed their deployment yet.
In April and May this year, when FIIs were net sellers to the tune of Rs 1,850 crore (Rs 18.50 billion), mutual funds came to the rescue with purchases of Rs 4,780 crore (Rs 47.80 billion).
The new offerings by two equity funds that closed recently -- the Reliance Equity Linked Saving Scheme and the ABN Amro Dividend Yield Fund -- mobilised a combined sum of nearly Rs 1,200 crore (Rs 12 million).
Four other equity funds -- the Standard Chartered Premier Equity Fund, the Sundaram Capex Fund, the SBI Multicap Fund and the Birla Top 100 -- which are currently open for initial subscription, are expected to garner a minimum Rs 1,800 crore (Rs 18 billion).
This is going by the appetite for new fund offerings, the track record for mobilisations by respective fund companies and the sales targets set by them, says a fund distributor.
The Kotak Contra Fund, which was launched in the beginning of July and had a corpus of Rs 653 crore (Rs 6.53 billion) at the end of that month, is not fully deployed yet.
Similarly, the Fidelity Equity Fund, which was launched in April 2005 and commands a corpus of over Rs 2,000 crore (Rs 20 billion) currently, may not be fully invested yet, though the fund has not disclosed its full portfolio even once till now.
According to data sourced from mutualfundsindia.com, 109 equity schemes were sitting on Rs 3,472 crore (Rs 34.72 billion) of cash at the end of July. The aggregate figure for August is not out yet. But mutual funds may still be sitting on a similar amount.
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