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

April 17, 2007 10:55 IST
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Mutual funds bought into banking, telecom, steel, oil and gas, and media sectors in March. Auto, cement & construction, aluminium, and IT stocks weighed heavy on their sell list, while stocks were re-aligned in the FMCG, manufacturing and engineering space.

A study of the top ten mutual funds' equity portfolios as on March 30, which are Reliance, ICICI Prudential, UTI, HDFC, Templeton, Birla SunLife, SBI, Tata, DSP ML, and Kotak Mutual Fund reveals that funds bought huge chunks of metal major SAIL, engineering stock KEC Infrastructures, while diluted their exposure to FMCG major ITC.

Equity IPOs bought No. of Shares
Idea Cellular 20,312,196
Page Industries 693,945
Raj Television Network 308,500
Mindtree Consulting 5,750

In terms of value, Tata Steel, Idea Cellular, and SBI were the top purchases by MFs, while ITC, Bajaj Auto, and Suzlon Energy topped the sell list. Meanwhile, equity IPOs failed to attract funds as they invested in only four of the 15 IPOs that listed in March with Idea Cellular being the hot favourite.

Equity IPOs hot with Mutual Funds:

Among the IPOs that listed in March, Idea Cellular was the most favourite pick with seven of the top 10 MFs purchasing over 203 lakh shares of stock. Templeton MF was the top buyer with almost 126 lakh shares bought.

Top shares traded by MFs (based on volume)

Top 5 shares bought

No. of Shares

Idea Cellular 20,312,196
Steel Authority of India 7,946,002
KEC Infrastructures 7,619,874
Hindustan Lever 7,397,830
Tata Steel 5,302,477
Top 5 shares sold

No. of Shares

ITC 15,381,474
Ashok Leyland 10,597,853
Exide Industries 8,765,895
NTPC 3,951,390
Tamil Nadu Newsprint 3,667,597

Three of the top 10 fund houses invested in the textile manufacturing stock Page Industries, purchasing over 6.9 lakh shares. HDFC MF was the top investor in the IPO with a total of over 3.2 lakh shares bought. Tata and ICICI Prudential MF were the other funds that invested in Page Industries IPO.

Kotak MF together bought over 3 lakh shares of media stock Raj Television Network, while Templeton and Kotak MF purchased a total of over 5,750 shares of software stock Mindtree Consulting IPO.

Meanwhile, a host of other equity IPOs Lawreshwar Polymers, Euro Ceramics, Broadcast Initiatives, Oriental Trimex, Indus Fila, Evinix Accessories, Vijayeswari Textiles, Astral Poly Technik, Jagjanani Textiles, AMD Metplast, and Abhishek Mills failed to attract funds.

Stocks and Sectors that attracted Funds:

SAIL - the top bought stock was purchased by seven out of the top ten funds. ICICI Pru MF was the top buyer of the stock with over 73 lakh shares bought. Templeton, Kotak, Tata, DSP ML, SBI, and HDFC MF also added to its investments in the stock, while Reliance, Birla, and UTI MF pared exposure to it.

Top shares traded by MFs (based on value)
Top 5 shares bought

Value (Rs in cr)

Tata Steel 238.40
Idea Cellular 192.05
State Bank of India 185.36
Reliance Industries 177.79
Hindustan Lever 151.84
Top 5 shares sold

Value (Rs in cr)

ITC 231.34
Bajaj Auto 198.23
Suzlon Energy 167.14
Infosys Technologies 95.47
Sesa Goa 92.32

Tata Steel, yet another steel major was the top bought stock in terms of value. It was bought by nine MFs. Reliance MF was the top buyer with over 21 lakh shares bought. Among other steel stocks Welspun Gujarat was bought, while Adhunik Metaliks was among the top sells.

ITC, the top sell both in terms of volume and value, was sold by seven of the top 10 funds, while DSP ML, Reliance, and SBI MF bought it. ICICI Pru MF with over 61.6 lakh shares sold was the top seller of the stock. Among other FMCG stocks, Hindustan Lever, and Marico were bought.

Among other sectors that attracted funds, banking stocks IFCI, IDFC, Union Bank, SBI, Bank of Baroda, Geojit, IDBI, Federal Bank, ICICI Bank, Jindal South West Holdings, Syndicate Bank, Centurion Bank, and HDFC Bank were bought, while PNB, Indian Bank, Development Credit Bank, Network 18 Fincap, and Canara Bank were sold.

Telecom pivotals MTNL, and ITI were bought. Buying was also seen in media stocks Zee News, TV Today, and Television Eighteen, while Wire and Wireless was sold. Oil and gas majors Reliance Industries, HPCL, and ONGC were bought, while BPCL was sold.

Funds pared exposure to auto stocks Ashok Leyland, Exide, TVS Motor, Phoenix Lamps, Ceat, Amtek Auto, Bajaj Auto, Hero Honda, and Federal Mogul, but bought Tata Motors, Rico Auto, Hindustan Motors, JK Industries, and Motherson Sumi. Aluminium majors Hindalco, and Nalco were sold.

Cement and construction stocks IVRCL, HCC,Mysore Cements, Ansal Properties, ACC, and Birla Corporation were sold, while Gujarat Ambuja, Gammon, and Nagarjuna Construction figured among the top 50 buys.

Heavy selling was also seen in IT stocks Satyam, Firstsource Solutions, NIIT Technologies, Infosys, and TCS, while Wipro was bought.

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