Money managers increased their holdings in select stocks amid the ongoing weakness in the domestic equity market. In the midcap space, domestic mutual funds upped their holdings in players like L&T Finance Holdings, Escorts Kubota and Alkyl Amines Chemicals.
Data available with ICICIdirect showed that mutual funds raised their stake in L&T Finance Holdings to 345 lakh shares in May 2022 from 243 lakh shares, taking their total investment in the stock to Rs 262 crore. Likewise, they increased their holdings in Escorts Kubota to 76 lakh shares from 55 lakh shares and Alkyl Amines Chemicals to 4 lakh shares from 3 lakh shares earlier.
Inflows in mutual funds stood strong despite the ongoing correction in the domestic equity market. ICICIdirect said, “In May 2022, when the Nifty fell below 16,000, inflows ex-NFOs increased to Rs 18,500 crore against Rs 12,800 crore in April, a 45 per cent jump. Similar higher inflows were seen in March 2022 as well as in March, April 2020 when markets had fallen. The trend of higher inflows during fall continues,” the brokerage said.
Meanwhile, SIP inflows continue to trend higher with inflows in May 2022 stood at Rs 12,300 crore. The benchmark equity indices BSE Sensex dipped 2.62 per cent in May, while broader indices including BSE Midcap and Smallcap declined 5.21 per cent and 7.83 per cent, respectively.
Data further highlighted that mutual funds also bought additional shares in Devyani International (354 lakh shares from 309 lakh shares earlier), Sundaram Finance (129 lakh shares from 114 lakh shares), Vodafone Idea (4,037 lakh shares from 3,627 lakh shares), Laurus Labs (228 lakh shares from 207 lakh shares), CG Power and Industrial Solutions (401 lakh shares from 366 lakh shares), Endurance Technologies (130 lakh shares from 120 lakh shares) and Navin Fluorine International (87 lakh shares from 81 lakh shares).
On the other hand, mutual funds sold some of their stakes in Aditya Birla Sun Life AMC, Ruchi Soya Industries, Aditya Birla Capital, Varun Beverages, Petronet LNG, Canara Bank, Jindal Steel & Power, Punjab National Bank, ACC, Deepak Nitrite.
Sharing his thoughts on wealth creation amid the ongoing uncertainty in the domestic equity markets, Navneet Munot, managing director and chief executive officer said, “For Indian equities, strong retail participation (63 per cent increase in Demat accounts in FY22) and robust mutual fund flows have cushioned the downside from recent FPI selling spree. However, volatility is likely to remain elevated. Investors’ equanimity and patience will continue to be tested in the foreseeable future but don’t we know from history that the formula for wealth creation equates sound investment + time + patience.”