In August mutual funds reduced their stakes in RIL, TCS, Infosys

14 Sep 2022 , 12:17 PM

In August, despite significant inflows from foreign portfolio investors, equity mutual funds (MFs) reduced their holdings in prominent companies like Reliance Industries, Infosys, and Tata Consultancy Services (TCS) (FPIs).

For the first time in 17 months, MFs sold shares worth Rs1,200 crore last month, turning net sellers. FPIs, on the other side, purchased shares for Rs51,204 crore. From October 2021 to June 2022, FPIs sold more than they bought. During this time, they sold off equities worth Rs3 trillion.

Industry insiders claimed domestic funds made the decision to post gains due to valuation issues raised by a significant increase in international inflows. Shares of RIL, Bharti Airtel, and Infosys totaling Rs2,030 crore, Rs1,950 crore, and Rs1,120 crore, respectively, were sold. The other two equities that experienced sales of more than Rs1,000 crore each were HDFC Life Insurance (Rs1,080 crore) and TCS (Rs1,080 crore).

In general, MFs slow down when FPIs purchase and speed up when they sell. The most popular stock purchased by MFs in August, Sona BLW Precision Forgings, attracted an investment of approximately Rs1,900 crore. A portion of the stake of Blackstone in Sona, a significant private equity player, was sold off to MFs.

Kotak Mahindra Bank and state-owned NTPC were the next-most frequently purchased stocks, with net purchases totaling Rs948 crore (Rs850 crore). The most popular stocks in the midcap sector, outside Sona BLW, were Max Healthcare (Rs760 crore), NMDC (Rs600 crore), and Gland Pharma (Rs460 crore).

The three small caps with the greatest inflows were Rolex Rings (Rs460 crore), Kirl Pneumatic (Rs240 crore), and Syrma SGS Tech (Rs180 crore). The three companies with the largest outflows from the small-cap market were Kirloskar Oil (Rs170 crore), Granules India (Rs120 crore), and VIP Industries (Rs90 crore).

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