Key stocks that mutual funds bought and sold in June 2022

One of the key drivers of stock markets is what are the big institutions buying. Of course, the foreign portfolio investors have been net sellers in Indian equities since October 2021. However, even in these tough times, the domestic mutual funds have been net buyers in the stock markets. That is because they have been receiving a steady inflow of capital, especially from the systematic investment plans (SIPs). Let us look at what the Indian mutual funds bought and sold in the month of June 2022.

Large caps, mid-caps and small caps that Mutual Funds churned in June 2022

When we talk about large caps, mid-caps and small caps in the mutual fund portfolio context, we use the same definition used by AMFI. So, once the entire spread of listed companies on the NSE and BSE are ranked on market cap, the top 100 become large cap companies. Mid-caps are the companies ranked from 101st to 250th in this ranking. The remaining companies would fall under the residual small cap category. Here is what the mutual funds bought and sold in each of these categories in June 2022.

    a) Let me begin with the large cap stocks that mutual funds bought in June 2022. The buying list included 177 lakh shares of Vedanta, 118 lakh shares of Tech Mahindra, 103 lakh shares of ICICI Lombard, 45 lakh shares of Grasim Industries, 42 lakh shares of Havells and 41 lakh shares of Godrej Consumer Products. At the same time, the mutual funds sold 154 lakh shares of Zomato, 105 lakh shares of Tata Steel, 45 lakh shares of DLF Ltd and 39 lakh shares of LIC. Let us now turn to the mid-cap story in June 2022.

    b) For June 2022, mid-cap buying included 623 lakh shares of Motherson Sumi Wiring, 569 lakh shares of IDFC First Bank, 113 lakh shares of India Energy Exchange (IEX) and 41 lakh shares each of Tata Communications. In the mid cap space, mutual funds sold 654 lakh shares of Vodafone Idea, 250 lakh shares of GMR Infrastructure, 128 lakh shares of L&T Finance Holdings, 89 lakh shares of BHEL and 72 lakh shares of Sun TV. The trend was to exit stocks that were more vulnerable to the global macro headwinds.

    c) Let us turn to what mutual funds added in the small cap space. They added 58 lakh shares of Aether Industries, 17 lakh shares JTEKT India, 14 lakh shares Mirza  and 11 lakh shares each of Rain Industries & Tata Coffee. Among the major small cap selling, the mutual funds offloaded 188 lakh shares of RBL Bank, 74 lakh shares of Indiabulls Housing Finance, 29 lakh shares of Strides Pharma and 25 lakh shares each of Greaves Cotton and Chennai Petro. There was a good deal of profit booking in small caps.

To sum up the macro story of mutual fund investment patterns in June 2022, the churn showed a sense of urgency to exit stagnating stocks or in stocks which displayed a high degree of vulnerability to macro headwinds. The focus of mutual funds has been on the macro headwinds, which seems to be quite sticky for now.

A quick look at the top-3 funds by AUM bought in June 2022

Here is a quick check on what SBI MF, ICICI Prudential MF and HDFC MF bought in June:

    • In terms of percentage accretion, the top-10 buys for SBI Mutual Fund included Aether Industries, Brigade Enterprises, United Breweries, Pfizer Ltd, Zomato Ltd, Prestige Estates, IDFC First Bank, CESC Ltd, Zydus Wellness and Zee Entertainment.
 
    • For ICICI Prudential Mutual Fund, the top-10 buys for the month of June 2022 included Gland Pharma, HPCL, Tata Communications, Oberoi Realty, GO Fashions, Nazra Technologies, Muthoot Finance, NMDC, Interglobe Aviation and Biocon Ltd.

    • For HDFC Mutual Fund, the top-10 buys for the month of June 2022 included Coforge Ltd, IEX Ltd, Ajanta Pharma, MTAR Technologies, Grasim Industries, Mirza International, Wipro, Mahindra & Mahindra, Eicher Motors and Asian Paints.

Just a word of caution that this is just an indicative list of what mutual funds have actually bought in June 2022. Investors have to consult their financial advisors before taking position in any of these stocks.