Which large-cap stocks did domestic mutual funds buy last quarter?

Indian stock market indices are consolidating around 5% below the record highs touched in October last year amid concerns of monetary tightening and an impending war situation in Ukraine.

Foreign portfolio investors (FPIs), or foreign institutional investors (FIIs), have been the driver of local bourses historically, but mutual funds (MFs) have also become significant in the last few years given the rush of local liquidity. In fact, the bull run over the past couple of years is largely attributed to the flow of cash into domestic mutual funds, who have in turn pumped in money into the stock market.

While most local fund managers have been voicing concerns about the state of valuations, quarterly shareholding data shows they pushed up their holding in hundreds of listed companies.

In particular, MFs hiked stake in as many as 108 companies that have a valuation of $1 billion or more last quarter (as against 42 companies for FIIs) compared with 129 companies in the preceding quarter ended September.

Of these, 58 were large-cap companies, compared with 74 large caps where MFs push up their holding in the three months ended September 30.

Mutual fund managers were bullish on top private-sector banks, large software service companies, cement producers, selective FMCG and automobile makers, engineering companies and selective financial services counters.

This is in contrast to FIIs, who were bullish on insurance firms, mid-tier banks and financial services companies, a few real estate developers, mid-sized drugmakers, engineering and consumer durable firms.

Top large caps that saw MF buying

If we look at the pack of stocks with a market cap of Rs 20,000 crore ($2.6 billion) or more, then MFs pushed up their stake in HDFC Bank, Infosys, ICICI Bank, Bharti Airtel, HCL Tech, Wipro, L&T, Axis Bank, UltraTech Cement, Divi's Laboratories, SBI Life Insurance, M&M and L&T Info.

Among others, Dabur India, Siemens, Britannia, SBI Cards, Eicher Motors, IndusInd Bank, Indus Towers, Ambuja Cements, ICICI Lombard, United Spirits, UPL, Hero MotoCorp, Bank of Baroda and Procter & Gamble Hygiene also saw domestic mutual funds pick up additional shares.

Lower down the order, HDFC Asset Management, Hindustan Aeronautics, ABB India, Jindal Steel & Power, Punjab National Bank, ACC, PI Industries and Trent also saw buying activity by local fund managers.

Some large caps which saw buying from both foreign and domestic fund managers include HDFC Asset Management, Hindustan Aeronautics and ICICI Lombard.

Meanwhile, mutual funds picked up 2% or more additional stake last quarter in nine large caps. This pack includes Max Healthcare, Zee Entertainment, Ipca Laboratories, Axis Bank, ICICI Lombard, APL Apollo Tubes, Kajaria Ceramics, Bharat Forge and Max Financial Services.