What the Big-3 Mutual Funds bought and sold in July 2022

15 Aug 2022 , 11:13 AM

For the month of July 2022, the net inflows into debt funds and equity funds were positive. While debt fund flows turned around in July, equity flows tapered. However, the big action point was the inflows into passive funds, which actually led the way. Investors are cautious on debt due to rising yields, but are still positive on equity from a long term perspective. An important consideration in these markets is what the big AMCs are doing. Here we look at the portfolio shifts of the 3 largest mutual fund houses by equity fund AUM viz. SBI MF, ICICI Prudential MF and HDFC MF.

Here is how much of equity funds the Big-10 manage

Since our focus here is on the stocks that mutual funds bought and sold in July 2022, we benchmark on equity AUM rather than overall AUM.

Top Fund Houses ranked By equity fund AUM	Equity AUM (Rs crore) As on 31-Jul-2022
SBI Mutual Fund	₹ 414,640
ICICI Prudential Mutual Fund	₹ 222,630
HDFC Mutual Fund	₹ 199,140
Nippon India Mutual Fund	₹ 154,080
UTI Mutual Fund	₹ 152,720
Axis Mutual Fund	₹ 140,340
Kotak Mutual Fund	₹ 130,800
Aditya Birla SL Mutual Fund	₹ 110,810
Mirae Asset Mutual Fund	₹ 95,160
DSP Mutual Fund	₹ 65,630

Data Source: AMFI

In July 2022, equity fund AUM of most major funds surged over as the Nifty spiked by 8.4%. In terms of equity AUM, ICICI Prudential AMC has widened its gap over HDFC MF, while Nippon India Fund and UTI are moving up rapidly. The top ranks are still dominated by the bancassurance names, account for half of the top-10 MF players.

Here is why the top-10 AMCs matter. They account for over 90% of industry-wide equity AUM. As a proxy, we focus on the buy and sell actions of the 3 biggest AMCs by equity AUM for July 2022. These are the bellwether names that set the tone in the market.

Key equity portfolio shifts at SBI MF for July 2022

SBI Mutual Fund is the largest by overall AUM and equity AUM. In fact, the equity AUM of SBI MF at Rs4.15 trillion is almost equal to the equity AUM of ICICI Pru and HDFC MF combined. The top equity holdings of SBI MF are Reliance Industries, ICICI Bank, HDFC Bank and Infosys. Here are the major stocks that SBI MF bought and sold in July 2022.

July  2022 was another month of IPO drought. With IPOs drying up, it was about secondary market action. SBI Mutual Fund made fresh investment in just one stock during the month of July as it bought Chambal Fertilizers worth Rs3.48 crore. In addition, SBI MF added to its existing positions in several stocks. Here are positions that saw accretion in July 2022. SBI MF added 1.22 lakh shares of Persistent Systems, 2.70 lakh shares of Rain Industries and a smaller quantity of Max Financial Services to its existing portfolio.

SBI MF fully exited several stocks. It sold entire holdings worth Rs22.33 crore in Escorts Kubota, Rs3.75 crore stake in NBCC, Rs2.84 crore stake in Firstsource Solutions, Rs2.79 crore stake in Whirlpool, Rs2.45 crore stake in Solara Active Pharma, Rs1.44 crore stake in Indiabulls Housing and Rs1.19 crore stake in Intellectual Design Arena. Let us also look at stocks wherein SBI MF pared positions. In July 2022, SBI MF sold 12.85 lakh shares of Indian Terrain Fashions, 4.57 lakh shares of IGL and 1.43 lakh shares of MTAR. Clearly, SBI MF has used higher levels in July 2022 to pare stakes wherever possible to lighten its portfolio.

Key equity portfolio shifts at ICICI Prudential MF for July 2022

ICICI Pru AMC has been the second largest fund by overall AUM and also by equity AUM for more than a year. Its equity AUM at Rs2.23 trillion makes it an influential player in the equity space. The top equity holdings of ICICI Prudential MF are ICICI Bank, Infosys and HDFC Bank. Here is a quick look at what ICICI Pru MF bought and sold in the month of July 2022.

ICICI Prudential Mutual Fund repeated the story of June and did not buy any fresh stock in July 2022. The fund was using higher levels on the Nifty to consolidate its holdings rather than going overboard on the market amidst global headwinds that are far from favourable.

However, ICICI Pru MF did add to its positions in select stocks it already held. It added 9.07 lakh shares of Oil India Ltd, 4.82 lakh shares of Vardhman Textiles and 3.94 lakh shares of Chambal Fertilizers.

Let us look at the stocks that ICICI Pru MF exited in totality and where it reduced its stake. During July 2022, ICICI Prudential MF took total exit from Ashoka Buildcon (the road construction company), selling its entire stake worth Rs121.68 crore. There were no other stocks that ICICI Prudential Mutual Fund exited in the month of July 2022. There were also stocks where ICICI Prudential MF pared holdings in July 2022. It cut its stake in Indiabulls Housing Finance by 6.55 lakh shares, Kansai Nerolac Paints by 0.76 lakh shares and sold a much smaller quantity of 8,409 shares in Astra Zeneca during July 2022.

Key equity portfolio shifts at HDFC MF for July 2022

HDFC Mutual Fund may have dropped to third position in equity AUM rankings, but at Rs1.99 trillion, its equity shifts still remain a key influencing factor. As of July 2022, the top equity holdings of HDFC MF were ICICI Bank, HDFC Bank, SBI, Infosys and Reliance.

Fresh buying by HDFC MF was seen in just one stock. It made fresh buys of Rs1.54 crore in Deepak Nitrite, where operations have normalized after the fire incident at the factory in Gujarat. HDFC MF also used the correction in select stocks to add more at lower levels to buffer its holdings. It added 99.13 lakh shares of Zomato Ltd, 11.49 lakh shares of Coforge and 0.41 lakh shares of Sanofi India in July 2022 on attractive valuations.

Let us turn to stock exits. HDFC MF used the bounce in the Nifty and the mid-cap indices to fully exit a number of stocks. It sold its stake worth Rs121.68cr in Blue Star, Rs6.48 crore in Angel One, Rs1.54 crore in Rain Industries, Rs1.27 crore in Astral Ltd and Rs0.51 crore in Metropolis Healthcare. In addition, HDFC MF also cut its positions in Rites Ltd by 53.79 lakh shares, Indus Towers by 5.64 lakh shares and Dalmia Bharat by 0.50 lakh shares.

What is the gist of the MF churn story in July 2022? Funds have bought selectively in stocks where correction has been steep. Otherwise, funds have used higher levels to pare positions and sit on cash ahead of the market uncertainty. It remains to be seen, what happens once the IPO fever also starts to grip the markets.