Mutual fund investments in banks and public sector units rose in the fourth quarter of 2013-14, while pharma companies and select IT firms saw a dip.
Fund houses increased their exposure in 14 banks, quarter-on-quarter analysis of shareholding data of MF holding in 395 out of BSE 500 companies for the quarter ended March shows. MF investment in public sector bank SBI rose by R1,911 crore in the quarter, highest among banks, Capitaline data show. HDFC Bank and ICICI Bank saw their investment rising by R1,446 crore and R1,047 crore, respectively, in the quarter.
Federal Bank (R325 crore), Punjab National Bank (R278 crore), IndusInd Bank (R259 crore), Bank of Baroda (R187 crore) and Kotak Mahindra Bank (R169 crore) were some of the banks that saw a spike in MF investment in the quarter.
The BSE Bankex slid 9.4% in 2013 but gained 12.8% in the three months to March this year. Bank stocks have rallied on hopes of an improved economy and a new, stable government at the Centre. “Macro recovery and potential for post-election reforms should see a gradual reduction in stressed loans on lower slippages and higher recoveries. PSUs, in particular, may see NPLs falling by 3% in FY16, after increasing 17.5% in FY15E,” a March research note released by Goldman Sachs said.
Several public sector firms also saw a rise in the MF investment. MF investment in ONGC rose the most by R1,317 crore, followed by Power Finance Corporation (R790 crore), GAIL India (R674 crore), BPCL (R664 crore), Power Grid Corporation (R616 crore), Coal India (R393 crore), Container Corporation of India (R332 crore), Indian Oil (R328 crore) and Oil India (R297 crore).
Several of these stocks were part of the government’s CPSE ETF, an open-ended ETF comprising 10 PSU stocks, which got oversubscribed with a total collection of about R4,000 crore in March.
Among Sensex firms, MF investments rose the most in ITC (R3,180 crore), followed by L&T (R2,218 crore), SBI, HDFC Bank and ONGC (R1,317 crore). In percentage terms, investment in Gail (India) rose the most by 134%.
MF investments in Infosys fell the most by R2,384 crore in the March quarter. Wipro, another IT major, saw its investment falling by R547 crore. IT companies, which earn their revenues in dollars, were affected by the rupee’s appreciation of 3% in the March quarter. Bharti Airtel (R1,804 crore), Sesa Sterlite (R659 crore) and Reliance Industries (R370