Stocks the Big-3 mutual funds entered and exited in Jan 2021

Since we are only looking for an indicative picture, we will restrict to the 3 largest funds by AUM viz. SBI MF, HDFC MF and ICICI Pru MF and look at the stocks they entered, the stocks they exited and the stocks they either pruned or added positions.

Feb 19, 2021 10:02 IST India Infoline News Service

Have you ever wondered what the big guns among MFs have been buying and selling? Obviously, we are interested in those handful of funds that contribute to overall AUM in a significant way. If you merely consider equity AUM of the entire Indian mutual fund segment, then the 10 funds below account for more than 90% of the total equity fund AUM. Obviously, these are the funds that will exert a larger than life impact on stock markets.

Data Source: AMFI
The above chart captures the equity AUM of the Top-10 funds with the biggest equity footprint in India. Since we are only looking for an indicative picture, we will restrict to the 3 largest funds by AUM viz. SBI MF, HDFC MF and ICICI Pru MF and look at the stocks they entered, the stocks they exited and the stocks they either pruned or added positions.

Stocks that SBI Mutual Fund bought and sold in Jan-21

The list of fresh entries is dominated by the IPOs during the month. For example, the top two fresh additions to the portfolio of SBI MF were Antony Waste Handling and Indigo Paints. Both brought to the table profitable business models and an ability to scale. Apart from these two IPOs, SBI MF also took fresh entry positions in Wendt India, Equitas and Apollo Tyres, a stock that has been positively re-rated.

SBI MF also made some interesting exits in Jan-21. The fund exited Amara Raja Batteries on concerns over the results. It also exited one of the IPOs of last year, Route Mobile after a solid performance post-listing. SBI MF also exited its small position in Navneet Education.

As is normal with any large equity fund, SBI MF also churned its exposures during the month of Jan-21. It added a whopping 5.4 crore shares of SAIL betting on this staid PSU to catch up with other steel stars like Tata Steel and JSW Steel. It also added Indus Towers, formerly Bharti Infratel, after a lot of investors were seen gravitating towards the towers business of Bharti Airtel. Some of the notable reductions in Jan-21 in the SBI MF portfolio were Sobha and HDFC AMC.

Stocks that HDFC MF bought and sold in Jan-21

Even in the case of HDFC MF, there were a couple of interesting IPOs that dominated the new entries. Its largest fresh addition to the portfolio was IRFC to the tune of Rs.412 crore. It also added Indigo Paints to its portfolio and its preference for paints was visible in infusing Akzo Nobel into its portfolio. HDFC MF also showed a preference for auto related stocks adding Bharat Forge and Lumax betting on a turnaround in auto demand. An interesting new introduction to the portfolio was TEECl, a power infrastructure company even as it introduced smaller quantities of MRF and Dr. Lal Pathlabs.

There were significant full exits made by HDFC MF during Jan-21. It exited Angel Broking it had acquired in the IPO as did it exit L&T Infotech, SRF and IFB Industries. Then there were smaller exits from stocks like NALCO, Torrent Power and Technocraft where HDFC MF opted to exit its holdings in entirety.

During the month of Jan-21, HDFC MF added positions in Teamlease, Piramal Enterprises and Ramco Cements. Teamlease has been a big beneficiary of the pandemic and Ramco has gained from robust cement demand. PEL is a bet that the worst may be over for the stock. HDFC MF scaled down its positions in stocks like Ashok Leyland, Havells and DLF. In all the three cases, there had been a sharp rally in recent months, and it appears to be more a case of strategic profit booking.

What are the stocks that ICICI Prudential MF bought and sold in Jan-21?

ICICI Pru MF is the third largest fund in India; both in terms of overall AUM and in terms of equity AUM. During the month of Jan-21, ICICI Pru added two fresh IPOs to its portfolio viz. Home First Finance and Indigo Paints. Interestingly, Indigo Paints has been preferred by all the large funds. ICICI Pru exited Neogen Chemicals and Hatsun Agro during the month.

During the month of Jan-21, ICICI Pru MF added exposure to stocks like SKF India, Century Textiles and Sundaram Finance. SKF and Sundaram appear to be clear mid cap bets on the likely recovery in growth in the Indian economy. However, ICICI Pru MF pruned its holdings in AstraZeneca which could be about playing safe ahead of the uncertainties of COVID vaccine administration. It also scaled down its holdings in VST Industries and Orient Cements.

Even as lump-sum retail money flows into equity funds have been faltering, the fund managers are using higher levels in the market to re-orient their portfolios in sync with stocks and ideas that are future-perfect. The actual outcome should be more evident in the coming months.

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