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The mutual fund industry has offloaded 22 per cent of Power Grid Corporation shares worth ₹1,905 crore in May, as prospects of the company looked bleak with no major new power project being launched and a sharp decline in power generation.
Kaustubh Belapurkar, Director (Fund Research), Morningstar, said the recent sell-off in the PowerGrid stock in May was largely due to offloading by one large AMC which had been holding the stock for a long time and looked to book some profit.
Led by investment in NTPC at ₹2,700 crore, mutual funds’ investment in power companies so far this year was up at ₹28,000 crore (₹26,000 crore), he added.
Mutual funds have also sold shares of InterGlobe Aviation and Pidilite Industries worth ₹523 crore and ₹297 crore, respectively.
IndiGo’s woes
Among small- and mid-cap stocks that were hived off by mutual funds are Cyient (₹133 crore), Repco Home Finance (₹118 crore), Crisil (₹111 crore), Reliance Infrastructure (₹95 crore) and PC Jeweller (₹93 crore).
While rising fuel prices have put pressure on margins of airlines, IndiGo has its own set of problems with multiple aircraft being grounded by the Directorate General of Civil Aviation due to engine issues, leading to weak outlook on airline stocks, said Belapurkar.
The exposure of mutual funds to aviation stocks is down 35 per cent this year to ₹3,200 crore (₹4,900 crore). Majority of the investments are in InterGlobe Aviation (₹2,600 crore).
Prominent scrips
Fund houses have sold close to ₹1,200 crore in InterGlobe Aviation and ₹200 crore in Jet Airways so far this year.
HDFC and Infosys were on top of the buying list of large-cap funds, with share purchases of ₹1,424 crore and ₹1,145 crore, respectively. Fund houses mopped up 14 per cent in HCL Technologies for ₹935 crore, while ITC attracted an investment of ₹952 crore.
HDFC Bank topped the list of mutual fund holdings at ₹53,104 crore, while ICICI Bank and Infosys followed with investment of ₹27,652 crore and ₹27,177 crore, respectively.
With investment of ₹4,237 crore and ₹4,178 crore, Tata Chemicals and Divi’s Labs topped the small- and mid-cap holdings, followed by Max Financial Services (₹3,767 crore) and Cholamandalam Investment & Financial Services (₹3,733 crore).
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