Even as mutual funds generated significant returns in 2012 and their net asset values rose sharply on the back of a rising overall markets, their shareholding in the 30 companies that form the Sensex shrank during the year as investors rushed to book profits.
According to Bombay Stock Exchange data, only six companies out of the 30, saw mutual funds and UTI raise their holdings in them during the year. The remaining 24 companies saw a fall in the mutual funds shareholding at December-end 2012 against December 2011.
Mutual fund’s holding in Cipla went down by 4.1 percentage point during the year as it came down from 9.12 per cent in December 2011 to 5.02 per cent in December 2012. That in Tata Power went down by 2.9 percentage points and in Mahindra & Mahindra it came down from 3.23 per cent in December 2011 to 1.74 per cent in December 2012.
Industry experts say that the decline in holdings by mutual funds is on account of redemption done by investors. “It is simply because of the redemption’s by investors as they exited when the markets rose,” said S Naren, CIO, ICICI Prudential AMC.
While the redemption picked up in February 2012 when the markets rose sharply in the first two months of the calendar, the trend picked up again towards the end of the year and the net outflow from equity schemes in the last 5 months between August and December 2012 stood at Rs 9,837 crore. The ones that saw mutual funds raise their holdings are Dr. Reddy’s Laboratories, Maruti Suzuki, L&T, SBI, HDFC and ICICI Bank and the stake hike in each of them was less than 1 percentage point.
According to Association of Mutual Funds in India data, in the calendar 2012, the net outflow from equity schemes stood at Rs 14,114 crore which led to a drop in mutual funds holding in large number of Sensex companies.
Even as the Sensex rose by 26 per cent and the BSE 100 (that includes 100 stocks) rose by 30 per cent during the calendar 2012, equity assets under management (AUM) of the mutual fund industry rose by only 18.4 per cent from Rs 1,40,612 crore in December 2011 to Rs 1,66,538 crore in December 2012.
Even the shareholding of insurance companies in majority of these companies has gone down.
Out of the 27 companies for which the insurance shareholding data was available, 19 companies have witnessed a decline in their shareholding by insurance companies and 8 of them have witnessed a hike. While Cipla and ICICI Bank witnessed the maximum dip in the shareholding by insurance companies of 4.5 and 2.9 percentage points respectively, ONGC and BHEL saw the maximum increase of shareholding by insurance companies of 4.6 and 2.7 percentage points respectively.