Edelweiss Fund Insight: Mutual Funds continued to remain net sellers in all the sectors

In December the Mutual Funds continued to remain net sellers in all the sectors with Banking & Finance, Cement & Engineering, FMCG and Metals being the top ones. Interestingly in the last two months- MFs are selling Banking & Finance and FMCG stocks while FPIs are buyers in those sectors. In December MFs sold equities almost worth Rs 370 bn while FPIs bought Rs 500 bn worth equities in the secondary market.

In December MFs sold equities almost worth Rs 370 bn while FPIs bought Rs 500 bn worth equities in the secondary market: Reuters

In December the Mutual Funds continued to remain net sellers in all the sectors with Banking & Finance, Cement & Engineering, FMCG and Metals being the top ones. Interestingly in the last two months- MFs are selling Banking & Finance and FMCG stocks while FPIs are buyers in those sectors. In December MFs sold equities almost worth Rs 370 bn while FPIs bought Rs 500 bn worth equities in the secondary market.

The MF industry continued to remain underweight in the Banking & Finance Sector (vs. NSE 200 Index). The top sell in BFSI names were Kotak Mahindra Bank (Rs 25 bn), ICICI Bank (Rs 24 bn) , HDFC Bank (Rs 19 bn) , HDFC Ltd (Rs 15 bn) and SBI (Rs 12 bn) were other top sells. In Oil & Gas – Vedanta (Rs 18 Bn) and RIL (Rs 14 bn) were major exit while In FMCG Major exit were Hindustan Unilever (Rs 7 bn), Trent (Rs 4 bn), Asian Paints (Rs 4 bn) , Titan (Rs 3.5 bn) and Tata Consumer (Rs 3.1 bn).

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Interestingly two key MF holders have reduced stake significantly in Vedanta in December month. There is a good possibility of them reducing stake to the promoters via a block deal which happened last month at 160/share in which promoters bought 4.98% of the equity. The two key holders are - ICICI Prudential MF (sold 46 mn shares worth Rs 7.5 bn) and HDFC MF (sold 41.89 mn shares worth Rs 6.7 bn). Meanwhile the major additions were in IRCTC (Rs 10 bn), Max Financial (Rs 7 bn), Axis Bank(Rs 6 bn) and freshly listed - Burger King (Rs 6 bn).

Franklin Templeton MFs major additions were Bosch (Rs 1.03 bn), Borosil Renewables(Rs 0.79 bn) and Metropolis Health(Rs 0.45 bn). The fund reduced exposure in State Bank of India(Rs 1.6 bn), HDFC Bank(Rs 1.32 bn) and ICICI Bank(Rs 1.26 bn). The list of new entries included Borosil Renewables and Mrs. Bectors Foods while Vodafone Idea was a complete exit.

HDFC MFs large additions were Sun Pharma (Rs 3.2 bn), IRCTC (Rs 2.39 bn) and Mahindra & Mahindra (Rs 1.99 bn). It's prominent reductions were Infosys (Rs 8.25 bn), Vedanta (Rs 6.76 bn) and Tata Steel (Rs 4.97 bn). IRCTC and M&M Fin were new entrants while L & T Infotech was a complete exit.

ICICI Pru MFs major additions were Federal Bank (Rs 2.01 bn), Axis Bank (Rs 1.91 bn) and HCL Technologies (Rs 1.65 bn). The fund reduced Vedanta(Rs 7.48 bn), Bharti Airtel (Rs 6.12 bn) and NTPC(Rs 6.03 bn). Burger King and Sundaram Clayton were new entrants while Bodal Chemicals was a complete exit.

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