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Nilanjan Dey

Prudential ICICI, HDFC, HSBC Mutual seen in action

Kolkata , May 3

Deals involving critical stakes of companies are happening at breakneck speed in the realm of asset management. A number of mutual funds are known to have bought and sold sizeable quantities of shares in mid- and small-cap companies, including newly listed entities like Kewal Kiran Clothing.

Companies such as CMC Ltd, KEC International, Jindal South West Holdings and Indo Tech Transformers, which have recently communicated particulars of the deals to the stock exchanges, have seen the involvement of fund houses such as Prudential ICICI, HDFC and HSBC in the transactions.

HDFC MF seems to have been especially active on this front in the last few weeks. It has acquired and disposed of shares of CMC Ltd through schemes such as HDFC Equity Fund, HDFC Core & Satellite Fund, HDFC Monthly Income Plan and HDFC Multiple Yield Fund.

HDFC Equity, for instance, has bought 5.3 lakh shares — amounting to 3.55 per cent of CMC's paid-up capital — over a number of days. The mode of acquisition, the NSE has been informed, is through market purchase. The fund's shareholding in the company after the acquisition is 6.85 per cent. Smaller deals have been made by a few of the other funds in the HDFC MF stable.

KEC International has advised that HDFC MF's holding in its capital through various schemes has decreased by over 2 per cent. Among these is HDFC Premier Multi-Cap Fund, which had 5.57 lakh shares, aggregating to 1.48 per cent of the company as on April 21. Also, HDFC Core & Satellite Fund held 4.67 lakh shares amounting to 1.24 per cent of the company on that date.

Indo Tech Transformers Ltd has informed the exchange that Prudential ICICI MF has through three separate funds acquired 1.19 lakh shares, involving 1.12 per cent of its paid-up base. The funds are Pru ICICI Balanced, Pru ICICI Emerging STAR and Pru ICICI Tax Plan. The mode of acquisition is the secondary market. The total holding by the fund house in the company is a high 5.47 per cent.

Pru ICICI MF has, through Pru ICICI Fusion Fund, taken over a lakh shares (1.1 per cent) of the paid-up capital of Kewal Kiran Clothing Ltd. HSBC Equity Fund has sold 6.32 lakh shares, aggregating 5.7 per cent of Jindal South West Holdings Ltd (as on April 25). The sale has been conducted through the secondary market.

HDFC Prudence

HDFC Prudence, a balanced fund, is overhauling its asset allocation strategy in view of a change in the definition of `equity-oriented fund' under the I-T Act.

The maximum allocation to equity and equity-linked instruments under the revised pattern will be 75 per cent, HDFC MF has mentioned, adding that debt and money market instruments can have a maximum 60 per cent allocation.

The new minimum allocations are 40 per cent and 25 per cent to equity and debt respectively. The existing provision involved 40-60 per cent to equity.

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