What the Big-3 Mutual Funds bought and sold in February 2024

21 Mar 2024 , 10:13 AM

BIG STORY OF MUTUAL FUND FLOWS IN FEBRUARY 2024

One of the best ways to understand the nature of equity flows in a particular month is to look at 5 key aspects. Here we look at the active equity fund flows, Hybrid / Passive Flows, Mutual fund NFOs, SIP flows in the month, and growth in SIP folios. These 5 aspects put together tell us the equity story of mutual funds for the month of February 2204. Here are some of the key takeaways.

2024. Let us start with the active equity fund flows for the month of February 2024. For the month, the net inflows into equity fund stood at ₹26,866 Crore. This entailed gross equity fund inflows of ₹58,923 Crore and gross redemptions of ₹32,057 Crore. Within the equity funds category, the biggest driver of net flows in the month of February 2024 was sectoral funds, followed by multi-cap / flex-cap funds, large & mid-cap funds and small cap funds in that order. The AUM as of February 2024 stood at ₹23.12 Trillion.
2025. Let us now turn to the hybrid and the passive stories; both of which have a strong equity content in them, although not directly like an active equity fund. The hybrid funds saw net inflows of ₹18,105 Crore in February 2024. The flows were, once again, led by arbitrage funds, followed by multi-asset allocation funds, equity savings funds, and dynamic asset allocation funds (BAFs) for the month of February 2024.
2026. On the mutual fund NFO front, the month of February 2024 saw net inflows of a healthy ₹11,720 Crore. At a category level, it was the active equity funds that accounted for ₹8,692 Crore, while hybrid funds saw NFO flows of ₹1,499 Crore and passive funds saw net inflows of ₹1,278 Crore. The equity NFO narrative for February 2024 was dominated by sectoral funds with the SBI Energy Opportunities Fund NFO accounting for bulk of the flows during the month.
2027. Let us now turn to the SIP flows story for February 2024. For the month, the gross SIP flows stood at ₹19,187 Crore, an all-time record. SIP flows are predominantly into equity funds and they represent the large retail interest in the equity markets. SIPs have grown sharply in terms of flows. For the first 11 months of FY24, SIP flows stood at ₹1.80 trillion; already higher than the previous full year.
2028. Finally, let us turn to the picture of SIP folios and SIP AUM which will give us a better picture of retail intensity. In fact, the former is a much sharper measure of retail intensity. Between January 2024 and February 2204, the SIP folios grew from 791.71 Crore folios to 820.18 Crore folios. While SIP AUM also scaled to ₹10.53 trillion in the month of February 2024, the good news is that the SIP stoppage ratio has reduced sharply in February 2024, promising a strong traction in equity AUM accretion.

Having seen the big story of equity mutual funds in India in the month of February 2024, let us now turn to how the big funds have ranked in terms of equity AUM. This ranking, it may be noted, is on equity AUM and not on overall AUM of the asset management companies.

BIG 10 FUND HOUSES AND THE AUM THEY CONTROL

Before looking at what the mutual funds bought and sold in February 2024, here is the ranking of the top AMCs on equity AUM for the month.

Top Fund Houses ranked By equity fund AUM	Equity AUM (₹ Crore) As on 29-Feb-2024
SBI Mutual Fund	₹6,25,174
ICICI Prudential Mutual Fund	₹3,81,503
HDFC Mutual Fund	₹3,50,132
Nippon India Mutual Fund	₹2,80,692
Kotak Mutual Fund	₹2,12,518
UTI Mutual Fund	₹2,12,176
Axis Mutual Fund	₹1,66,493
Aditya Birla SL Mutual Fund	₹1,47,635
Mirae Asset Mutual Fund	₹1,38,773
DSP Mutual Fund	₹91,729

Data Source: AMFI

In February 2024, equity fund AUM of major fund houses combined has crossed ₹30 trillion. Of course, here we include the equity component of hybrid funds and the equity component of passive funds too. As visible in the table above, SBI Mutual Fund continues to dominate the equity AUM of Indian funds, followed by ICICI Pru MF and HDFC MF. In the last one year, Nippon India MF and Kotak MF have come to the fourth and fifth spot, while UTI has gone lower to the sixth rank. Mirae and DSP are the only two fund houses in the above list which do not have the backing of an industrial house or a bank in India.

These top-10 AMCs account for over 92% of industry-wide equity AUM, and hence their actions are closely tracked by traders and investors. To make the analysis of portfolio movements more focused and granular, we just focus on the top 3 funds by equity AUM only. Hence, as a proxy, we look at the buy and sell actions of the 3 biggest AMCs by equity AUM for February 2024 viz. SBI MF, ICICI Pru MF and HDFC MF. Let us start with the biggest player in the Indian mutual fund segment. It may be noted here that mutual fund buying or selling is not a signal for investors to repeat their actions. It is just to give an idea of which way the wind is blowing in terms of mutual fund portfolio strategy.

HOW SBI MUTUAL FUND CHURNED STOCKS IN FEBRUARY 2024

SBI Mutual Fund is the largest by overall AUM and equity AUM by a margin; and it has held that distinction for more than 3 years now. In fact, the equity AUM of SBI MF at ₹6.25 trillion is nearly 64% higher than the equity AUM of the second largest AMC by equity AUM viz. ICICI Prudential Mutual Fund. SBI Mutual Fund has a substantial exposure to the equity stocks and its equity AUM dominates its overall AUM basket. The top equity holdings of SBI MF are HDFC Bank, ICICI Bank, and Reliance Industries Ltd. Here are the major stocks that SBI MF bought and sold in the month of February 2024.

Let us first look at the fresh buys of SBI Mutual Fund in the month of February 2024. In the absence of IPOs, the fund was focused more on the secondary markets in the month. It bought one new stock in the month as it accumulated ₹5.45 Crore worth of NIIT Learning Systems Ltd. Let us also turn to the stocks where SBI Mutual Fund added to its positions in the month of February 2024. During the month, SBI Mutual Fund a total of 26.69 Lakh shares of VIP Industries, 7.65 Lakh shares of KEC Industries Ltd and 3.04 Lakh shares of Oil India Ltd. Oil India has been among the top performers in the oil space in the recent past.

Let us now turn to the exits made by SBI MF in February 2024. During the month, SBI MF did not fully exit any of its significant equity holdings, which means the fund is still playing it cautious and with its extra-large corpus, it can just afford to do that. Let us finally look at the stock where SBI Mutual Fund reduce its positions in the month of February 2024. It reduced its positions by 242.25 Lakh shares of SJVN (Sutlej Jal Vayu Nigam) Ltd in the month. In addition, SBI Mutual Fund also cut its position by 14.24 Lakh shares in Delta Corporation and another 1.63 Lakh shares in Mazagon Dock Shipbuilders Ltd. The last one is rather surprising as the stock continues to get a lot of buying support from the market due to its strong defence franchise in the Indian market.

HOW ICICI PRUDENTIAL MUTUAL FUND CHURNED STOCKS IN FEBRUARY 2024

ICICI Pru AMC is the second largest fund by overall AUM and equity AUM for more than 3 years now. Its equity AUM at ₹3.82 trillion makes it an influential player in the equity space. While it may still trail SBI Mutual Fund in term of equity AUM, the fund has consistently widened its lead over HDFC Mutual Fund in the last few years. The top equity holdings of ICICI Prudential MF are ICICI Bank, HDFC Bank and Reliance Industries Ltd. Here is a look at what ICICI Pru MF bought and sold in February 2024.

ICICI Prudential Mutual Fund was fairly active in the IPO space, where there were opportunities during the month of February. Among the IPOs, ICICI Prudential added fresh positions of ₹46.23 Crore in Apeejay Surrendra Park Hotels Ltd and fresh position of ₹27.60 Crore in Rashi Peripherals. Among others, ICICI Prudential Mutual Fund also took fresh positions to the tune of ₹53.82 Crore in Ganesh Ecosphere and another fresh position of ₹10 Crore in Somany Ceramics Ltd. Apart from the fresh buying, ICICI Prudential Mutual Fund also added to its position in select stocks. The fund added 0.98 Lakh shares of Computer Age Management Services (CAMS) Ltd, 0.97 Lakh shares of Procter & Gamble Healthcare Ltd and 0.60 Lakh shares of Ratnamani Metals and Tubes Ltd.

Let us turn to stocks that ICICI Pru MF exited totally and where it reduced its stake. In February 2024, ICICI Prudential MF fully exited residual holdings in 4 stocks. It sold stocks worth ₹51.30 Crore in AMI organics, ₹36.60 Crore in Disman Carbogen Amcis Ltd, ₹3.26 Crore of shares in IKIO Lighting, and ₹0.73 Crore worth of shares in Arvind Smart Spaces Ltd. There were also stocks where ICICI Prudential MF reduced holdings in February 2024. It cut its stake in India Renewable Energy Development Agency (IREDA) by 46.87 Lakh shares, KFIN Technologies Ltd (formerly Karvy Computershare Ltd) by 8.19 Lakh shares, and Metropolis Healthcare Ltd by 2.73 Lakh shares.

HOW HDFC MUTUAL FUND CHURNED STOCKS IN FEBRUARY 2024

HDFC Mutual Fund may have dropped to third position in equity AUM rankings, but at ₹3.50 trillion, its equity shifts still remain a key influencing factor in the markets. That is still a substantial corpus and the fund is known to be ready on its feet to take opportunities that present in the market. As of February 2024, the top equity holdings of ICICI Bank, HDFC Bank, State Bank of India (SBI), Axis Bank Ltd and Reliance Industries.

HDFC MF was once gain not too active in IPOs. The only fresh stock that it added to its portfolio in the month of February 2024 was Sudarshan Chemicals Industries Ltd. The stock has been on the radar of brokers and fund managers for quite some time now. Being a specialty chemical plays, the stock is seen as a good play on the chemicals business that is starting to turn around after being in a state of quiescence for a long time. However, HDFC Mutual Fund also used the volatility in select stocks to add more into some of its holdings at lower levels. For the month of February 2024, HDFC Mutual fund added 18.52 Lakh shares of Whirlpool of India Ltd, 6.59 Lakh shares of GMM Pfaudler Ltd and 1.58 Lakh shares of Deepak Nitrite Ltd.

Let us turn to stock exits. HDFC MF exited some of its small residual investments in its entirety. The only stock that it fully exited in the month of February 2024 was Tata Metaliks Ltd following its amalgamation with Tata Steel Ltd. In addition, HDFC MF used higher levels to pare its stake in some of the holdings. For instance, during the month of February 2024, the fund sold 68.94 Lakh shares of GMR Airports Infrastructure Ltd, 51.92 Lakh shares of Steel Authority of India Ltd (SAIL), and a small quantity of MRF Ltd.

That was the crux of the MF churn story in the month of February 2024? Funds bought selectively in stocks where correction has been steep as well as in select IPOs. However, they also used the volatility to exit stocks, especially the ones that had rallied very sharply. There were two broad themes that emerge. Firstly, the top funds preferred domestic India stories over the global dollar defensive stories. Secondly, there was a subtle shift in favour of large cap stocks in the portfolio, over mid and small caps; considering peak levels of the Nifty and the Sensex.