Mutual Funds Pour ₹42,000 Crore into HDFC Bank in H1 2024

12 Jul 2024 , 02:16 PM

Mutual funds purchased HDFC Bank shares worth over ₹42,000 Crore in the first half of 2024, while foreign investors slightly reduced their exposure to India’s largest bank by market capitalization. 

In June alone, mutual funds acquired 4.09 Crore HDFC Bank shares valued at ₹6,887 Crore, marking the sixth consecutive month of significant buying. Previous monthly acquisitions include ₹7,600 Crore in May, ₹1,886 Crore in April, ₹4,600 Crore in March, ₹8,432 Crore in February, and ₹12,884 Crore in January.

ICICI Prudential MF led individual schemes with purchases totaling around ₹10,750 Crore, followed by Quant Mutual Fund and HDFC Mutual Fund at approximately ₹7,754 Crore and ₹5,683 Crore, respectively. Significant buyers also included Kotak MF and Nippon India MF, acquiring shares worth ₹4,917 Crore and ₹4,765 Crore, respectively.

On the selling side, Canara Robeco MF was the largest seller, disposing of shares worth ₹790 Crore, followed by HSBC MF and Baroda BNP Paribas MF, which sold shares worth around ₹524 Crore and ₹155 Crore, respectively.

Mutual funds had purchased HDFC Bank shares worth over ₹70,000 Crore in 2023, compared to ₹23,800 Crore in 2022 and ₹11,768 Crore in 2021.

As of the June 2024 quarter, foreign ownership in HDFC Bank stood at 54.83%, slightly below MSCI’s 55.5% threshold for a weightage increase. This leaves a ‘foreign room’ of over 25% in the stock, crucial for its inclusion at full market-cap weight.

HDFC Bank holds a 3.8% weight in the MSCI EM index, with potential for inflows following MSCI’s decision expected on August 13. 

HDFC Bank’s management policy of not providing guidance amid macro uncertainties has drawn mixed reactions but is viewed favorably. In FY24, the bank reported a lower NIM of 3.4%, with a credit deposit ratio at 105%.