Mutual funds, which poured in over Rs 2,000 crore in Indian equity markets in March, pared their positions or made an exit in stocks such as Coal India, Divi’s Laboratories, Tech Mahindra, TCS and Dr. Reddy’s Laboratories which slipped up to 20 percent so far in the year.
After a lacklustre 2016, 2017 has been nothing short of a blockbuster year for investors with benchmark indices hitting fresh record highs in April. The S&P BSE Sensex and Nifty rose 11 percent and 12 percent respectively.
The large part of the rally was driven by abundance liquidity from both global as well as domestic investors who poured in close to Rs 30K crore in January-March period.
Stocks, which mutual funds dropped in March based on market value, include names like Axis Bank, Divi’s Laboratories, Tech Mahindra, Coal India, Bharti Airtel, TCS, Dr Reddy’s Laboratories, JSW Steel, Ashok Leyland, BHEL, Orient Cement, Info Edge, Equitas Holdings, Sun Pharma etc. among others, said an IDBI Capital report.
This could be a sign of cautions for investors. Either mutual funds would have booked profits in these stocks or the fundamentals does not support the current valuation. In either case, it is a sign of caution for investors. Most of the stocks mentioned in the list have given negative return so far in the year.
Mutual funds were net buyers of equities in 21 trading session worth Rs 2,368 crore, as against net buying of Rs 1,850 crore in February 2017; however, the asset under management (AUM) dipped slightly.
The total AUM of the mutual fund industry decreased by 1.9 percent (Rs 34,428 Cr) to Rs17.54 lakh crore for the month of March 2017, IDBI Capital said in a report.
On a month-on-month (MoM) basis, five categories namely Balanced, ELSS, Other ETF’s, Equity Funds and Infrastructure Debt saw growth in AUM while categories like Income, GILT, Liquid, Gold ETF’s & FOF Overseas saw a decline, the report quoted.
Investors pumped in a record Rs 3.43 lakh crore in mutual funds (MFs) in FY17, mainly into income and liquid schemes, more than double of Rs 1,34,180 crore seen in 2015-16, according to the Association of Mutual Funds in India (Amfi) data.
The funds are largely channelised via mutual funds through systematic investment plans (SIPs). Some experts say that the trend has just started as we are in the middle of SIP revolution.
“SIP flows have been very consistent, have been growing every month and now the number for the industry is more than Rs 4,000 crore a month. So that has been the healthy sign and along with that we are also seeing regular inflows into the funds,” Harsha Upadhyaya, CIO-Equity, Kotak Mutual Fund said in an interview with CNBC-TV18.
“March was definitely a very strong month and the way April has started that also seems to be very good in terms of overall flows,”
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