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Largest equity fund manager loads up on Crompton, PSU stocks; dumps YES Bank

“Public sector stocks have been beaten down irrationally in the past despite superior balance sheets, just because the government is their owner,” veteran investor Shyam Sekhar rued in a recent interaction with ETMarkets.com.

, ETMarkets.com|
Last Updated: Jan 16, 2020, 03.36 PM IST
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SBI MF also went big after the newly-listed CSB Bank, adding some 76 lakh shares in December to raise cumulative holding to over 83 lakh shares.
SBI Mutual Fund, India’s third largest asset management company, continued to load up PSU stocks in December as well even as it dumped YES Bank after the private lender further delayed capital raising. The fund house was a net buyer of the stock in November.

SBI AMC bought 10 to 90 lakh shares of Power Grid, SJVN, Engineers India, ONGC, SBI, NTPC, Coal India, IDFC First Bank, IndianOil, PNB and Bank of Baroda from the PSU pack, according to data available on corporate database Ace Equity.

The fund house is loading up the state-owned companies at a time when these stocks have been giving flat returns. BSE PSU index is up 1.61 per cent in last one month, largely because of the government initiative to sell off oil marketing PSU BPCL, which has raised expectations of more strategic sales.

The index is down 1.64 per cent in last one year. Some analysts believe the underperformance had nothing to do with balance sheets of these public sector enterprises.

“Public sector stocks have been beaten down irrationally in the past despite superior balance sheets, just because the government is their owner,” veteran investor Shyam Sekhar rued in a recent interaction with ETMarkets.com.

He said if the government manages to sell a few companies, the PSU stocks may witness a very significant re-rating.

Led by ED and CIO Navneet Munot, the SBI Fund Management team bagged over 3 crore shares of appliances maker Crompton Greaves Consumer Electricals. As per December shareholding data, a single scheme from the fund house, SBI Large & Midcap Fund, now holds 5.78 per cent in the company.

The stock has underperformed Sensex in last one year, rising just 9.62 per cent against the 30-pack’s 14 per cent returns. Some brokerages are bullish on the scrip. HDFC Securities has a ‘buy’ recommendation on it with a price target of Rs 339, which suggests a 40 per cent upside.

Reliance Securities also suggests buying the stock for a price target of Rs 300, a potential upside of 24 per cent.

SBI MF also went big after the newly-listed CSB Bank, adding some 76 lakh shares in December to raise cumulative holding to over 83 lakh shares. All shares are held by SBI Magnum Global Fund account for 4.79 per cent stake in the Kerala-based bank.

What India’s top three mutual funds bought and sold in December

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Equity MF Inflows

15 Jan, 2020
Inflows into Indian equity funds rebounded after three months of decline in December as the nation’s benchmark stock index hit a series of record highs. Stock plans took in 45 billion rupees ($626 million) last month, according to the Association of Mutual Funds in India. That compares with 13.1 billion rupees received in November, which was the smallest inflow in more than three years.Here’s what the top three asset managers bought and sold:
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Meanwhile, the fund house sold 74 lakh shares of troubled lender YES Bank. The stock was also removed from Sensex in December, forcing a number of passive fund managers to dump the stock. A fund raising delay has been weighing on the stock.

Among others, SBI MF sold over 10 lakh shares of Equitas Holdings, Exide Industries, Vedanta, Tata Motors, ICICI Prudential, Interglobe Aviation, Bharti Airtel, BHEL, NIIT, Reliance Industries and Greenpanel Industries during the month.

Much of these monthly buying and selling happens for the exchange-traded funds, though normal equity fund schemes too witness regular rejigs.

December saw a jump in inflows into domestic equity funds. Net inflows to these schemes had plunged 78 per cent month-on-month to hit a multi-year low of Rs 1,311.65 crore in November, but they picked up to Rs 4,499.39 crore in December.

SBI MF is the largest equity investor among all domestic fund houses in the Indian market. As of December 31, its equity asset under management (AUM) stood at Rs 1.91 lakh crore against an overall AUM of Rs 3.61 lakh crore, which was next only to HDFC AMC’s Rs 3.71 lakh crore and ICICI Prudential AMC’s Rs 3.65 lakh crore.
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