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Stock Analysis, IPO, Mutual Funds, Bonds & More

At least 100 MF schemes own these stocks; that should mean something, right?

Domestic institutional investors have become one of the key market drivers in recent years.

, ETMarkets.com|
Updated: Feb 22, 2019, 02.58 PM IST
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Not surprisingly, the list of 78 stocks includes the usual suspects. HDFC Bank is part of at least 535 mutual fund schemes; ICICI Bank 528 schemes, State Bank of India 465 schemes and Axis Bank 450 schemes.
NEW DELHI: Following the crowd usually takes you nowhere in the stock market. True!

But what do you make of the stocks that figure in portfolios of one after another mutual fund scheme? At the end of January, there were 78 stocks that were part of the portfolios of at least 100 mutual fund schemes, including ETFs, data from Ace Mutual Fund showed.

Don’t forget domestic institutional investors have become one of the key market drivers in recent years, having managed to cushion severe corrections every time there has been a big selloff by the overseas portfolio investors.

Foreign portfolio investors have been net sellers in Indian market, having offloaded shares worth over Rs 34,000 crore since January 2018. DIIs poured in some Rs 1,15,000 crore in the same period.

Not surprisingly, the list of 78 stocks includes the usual suspects. HDFC Bank is part of at least 535 mutual fund schemes; ICICI Bank 528 schemes, State Bank of India 465 schemes and Axis Bank 450 schemes.

State Bank of India recently posted a net profit of Rs 3,955 crore year-on-year for December quarter against a net loss of Rs 2,416 crore posted for the corresponding quarter last year. Some 412 schemes held the stock at the end of January, 2018 and 452 at the end of December, 2018.

Global brokerages Jefferies and Nomura have ‘buy’ rating on SBI with price targets of Rs 365 and Rs 375, respectively.

Anand Rathi Financial Services is bullish on HDFC Bank with a target price of Rs 2,420. “Considering the opportunistic macro conditions, healthy balance sheet growth and superior asset quality and management, we believe the bank is well poised to deliver consistently with margin leadership and robust return ratios. We continue to be positive on the company from a medium to long-term perspective,” the brokerage said.

Among others, IT major Infosys, FMCG giant ITC and engineering conglomerate L&T were owned by more than 400 schemes as of January 2019.

Goldman Sachs is bullish on L&T with a target price of Rs 1,570. The brokerage believes domestic economic fundamentals will favour the company in the medium term. However, elections can have a temporary slowdown impact. Major sectors are anticipating capex growth going forward, it added.

Also on the list are Maruti Suzuki, Reliance Industries, Kotak Mahindra Bank, HDFC, Mahindra & Mahindra, Tata Consultancy Services, Sun Pharmaceuticals, Bharti Airtel, NTPC, Bajaj Finance and HUL, which were held by over 250 schemes.

Corporate banks, IT and consumer sectors delivered strong performance in December quarter, while auto and cement sectors disappointed the market.

Brokerage Motilal Oswal is positive on Maruti Suzuki and Kotak Mahindra Bank with price targets of Rs 8,131 and Rs 1,350, respectively. The brokerage has also increased weightage of Maruti Suzuki and Axis Bank in its model portfolio.

The mutual fund industry’s asset under management (AUM) stood at Rs 23.40 lakh crore in January 2019 compared with Rs 22.41 lakh crore in the same month last year. However, equity and equity-linked saving schemes saw Rs 6,158 crore inflow in January 2019, compared with a Rs 15,390 crore inflow in the year-ago month.

The slowdown in inflows has been attributed to uncertainty about the outcome of the forthcoming general elections and a prolonged depression in domestic stocks.

Despite the fall in inflows, equity fund managers stayed put on stocks like HCL Technologies, Asian Paints, Tech Mahindra, Tata Steel, Vedanta, IndusInd Bank, Titan, GAIL (India), Tata Motors and Aurobindo Pharma. There stocks featured in the portfolios of more than 200 schemes as of January 2019.

Among others, Coal India, Power Grid, Hero MotoCorp, Dr Reddy’s Laboratories, Cipla, Motherson Sumi, Cummins India, Petronet LNG, Britannia Industries, Grasim, Bajaj Finserv, M&M Financial Services, Hindalco, YES Bank, UltraTech Cement, ONGC, Bank of Baroda, The Federal Bank, Dabur India, MRF, ACC, Exide, Eicher Motors and UPL were other companies that were owned by at least 100 mutual fund schemes as of January 2019.

MF Schemes data
Source: Ace Mutual Fund



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