Amid the selling pressure by foreign institutional investors (FIIs), domestic investors via mutual funds have been absorbing the pressure and lifting the market to new highs. Indian equities stand as the powerhouse within the emerging market pack, marking a continuous surge.
According to a report from Nuvama Institutional Equtiies, FII sold to the tune of Rs 30,400 crore in May 2024, while the mutual funds (MFs)pumped in Rs 47,700 crore in the local equities. The market's relentless surge is fueled by India's steady economic growth, a favorable political landscape, and unwavering faith from Retail/HNI investors, deploying money directly or via MFs, it said.
In the large cap categories, a significant buying was seen by mutual funds in HDFC Bank, Infosys, Kotak Mahindra Bank and Hindustan Unilever. On the other hand, highest selling was seen in Bajaj Finance, Hind Aeronautics, Punjab National Bank and Bharat Electronics in the largecap space.
In the midcap space, Patanjali Foods was a new entry, while buying was seen in Suzlon Energy, Oracle Financial Services and Star Health Insurance, Persistent Systems and Vodafone Idea. Thermax, Coforge, Solar Industries, Sundaram Finance and Indus Towers saw the higher selling in the midcap space.
Nine out of eleven categories in equity schemes (growth) saw positive flows, with equity MF folios achieving a record high of Rs 12.9 crore in May, emphasizing the diverse triumph within the market. May orchestrates a SIP symphony, with monthly inflows hitting an all-time high of Rs 20,900 crore, up 51 per cent from January 2024.
In the smallcap category, MFs picked up fresh stake in recently-listed Go Digit General Insurance, Aadhar Housing Finance, TBO Tek and Indegene, along with Indiabulls Real Estate. Beside them, MFs bough the key Aptus Value Housing, Hudco and Prudent Corporate Advisory among others.
On the other hand, they have trimmed stakes in smallcaps like Hindustan Copper, Whirlpool India, Bharat Dynamic, BEML and Carborundum Universal. They have completely exited companies like Share India Securities, GMR Power and Urban Infra, Kopran, Pitti Engineering and Ujjivan Financial Services from the smallcap space.
The schemes that garnered maximum interest are in the smallcap and micap (SMID) pack, with inflows remaining steady, supported by continuous participation by Indian retailers. From February to April, flows had moderated but have now picked up again, reaching their highest at Rs 5,300 crore since January 2024, said Nuvama's report.