FMCG major Hindustan Unilever came under tremendous pressure during September 2020 with up to 7.1 million shares worth Rs1474cr being sold. Other heavily sold stocks included SBI, ICICI Bank, and HDFC Bank. Interestingly, while fund managers were positive on TCS and Tech Mahindra in the technology space, Infosys saw bouts of selling by MFs.
What did SBI Mutual Fund trade in September 2020?
Of course, you begin with the fund that is the market leader by a margin. With AUM in excess of Rs425,000cr, SBI MF is the fund to watch out for. Ironically, SBI Mutual Fund sold nearly 42 million shares of its parent SBI as the fund continued to be cautious on financials. Among the PSU, SBI MF also sold close to 29 million shares of BHEL. SBI MF also sold close to 15 million shares of ZEE and 14 million shares of Bharti Infratel, but that was more across the index ETFs after these two stocks were removed from the benchmark indices.
Apart from the index adjustment story, SBI MF also bought close to 1.5 crore shares of NHPC as well as smaller quantities of Chola Investments, Bharti Airtel, NTPC, CUB, ONGC, Bharat Force, Avenue Supermarts and Triveni Turbines. Outside of the adjustments in ETFs, SBI MF was a seller in ITC, GAIL, Crompton Greaves Consumer, Axis Bank, HDFC Bank and ICICI Bank. The last two have been on the sell list of most funds. SBI MF built fresh positions in select stocks like Adani Green, Bata India, Zydus, Hexaware and Redington. Among the IPO candidates, SBI built positions in CAMS, Happiest Minds and Route Mobile in Sep-20.
What were HDFC MF and ICICI Pru MF trading in the markets?
While SBI MF was one of the most active in the markets, HDFC MF was also doing its own portfolio shifts, During Sep-20, HDFC Mutual Fund’s added Bharti Airtel, HCL Technologies, TCS, HDFC Bank and Bosch to its existing portfolio. While HDFC MF bought HCL Tech worth Rs243cr, it infused Rs126cr into TCS. HDFC Mutual Fund was a heavy seller in counters like ICICI Bank and SBI Cards clearly showing a preference for IT over financials.
The third largest fund by AUM, ICICI Prudential Mutual Fund, was also adding up TCS to its portfolio in Sep-20. It infused close to Rs300cr into TCS alone. ICICI Prudential Fund also added to its positions in Bharti Airtel, HDFC, ITC and Zydus Wellness.
What did Birla and Axis mutual funds trade during Sep-20?
Aditya Birla Sun Life Mutual Fund was a heavy buyer in the Mindtree counter during the month of Sep-20. In fact, Birla MF infused close to Rs245cr into Mindtree. In addition, Aditya Birla MF also bought Tech Mahindra worth Rs175cr and TCS worth Rs149cr during the Sep-20. Birla MF was also a concerted seller in banking stocks. In fact, Birla heavily sold into counters like ICICI Bank, Axis Bank, Kotak Bank and HDFC Bank.
If Aditya Birla MF was piling up on IT stocks, Axis MF was not too far behind. Wipro and TCS were among the big purchases of Axis Mutual Fund during the month of September 2020. Axis Mutual Fund bought TCS worth Rs293cr and invested close to Rs253cr in Wipro. Axis also added stocks like Dr Reddy’s Labs, Essel Propack and PI Industries to its portfolio. Its interest in Reddy Labs was obviously driven by the Phase-3 trials that Reddy Labs is conducting for the Russian Sputnik vaccine. Axis Mutual Fund was selling heavily on Bharti Airtel which was ironically one of the most sought after stock. That surely looked like a contrarian sell by Axis Mutual Fund.
Long on IT, short on banks appears to be the theme
In the last one month, IT stocks have been among the top performers. Clearly, that surge in IT stocks has been led by some very concerted buying by mutual funds. The US stimulus combined with new WFH opportunities opens up new vistas for IT companies. The US may be tightening visa norms but India is already moving towards increased off-shoring by focusing less on onsite services. With the dollar gaining strength, IT is in a sweet spot.
Banks have given a brief rally but most fund managers remain sceptical about this sector due to the uncertainty over the EMI holiday, likely loan structuring and the possible impact on credit culture in India. With asset quality still an issue, mutual fund managers are clearing going long on IT and short on banks.