Infosys: On equity fund managers' radar; holdings rise

Raise exposure in the range of 50-100 basis points in May

Stocks of IT giant Infosys are once again on equity fund managers' radar. With around a month left before the software major comes with its first quarterly performance for the current financial year, fund managers were busy buying company's scrips in May.

Several of the equity schemes have raised exposure in Infosys in the range of 50 basis points to 100 basis points (bps) in the previous month. The month saw the counter once again raising its head and steadily gaining close to 8% from Rs 2,234 a share to Rs 2,407.

For instance, most of the top equity schemes from fund industry's giant HDFC Mutual Fund increased their holdings in infosys. Schemes like HDFC Growth, HDFC Top 200, HDFC Equity and HDFC Taxsaver among others raised exposure between 40 bps and 100 bps.

Likewise, Franklin Templeton's India Bluechip and Taxshield funds raised their holdings in Infosys by 40-60 bps.
Reliance Mutual Fund's Equity Opportunities and Vision funds bought heavily in IT giant as their exposure stood 90 bps increased.

This only escalated further in the last fortnight, thanks to steep depreciation in the Indian currency Rupee. And at one point of time the counter was trading well above the mark of Rs 2,500 - almost a rise of 14% since it touched its latest bottom post Q4 results.

The recent rise in Infosys' stocks must have given sigh of relief to fund managers who took a buy call on the counter as calls on the counter since December did not go very well with them. Rally in Infosys has benefitted the funds and at the same time they could also reap the benefits of dividends which the company announced at Rs 27 a share - one of the highest final dividends from Infosys in recent years.

However, market participants say that build up in position on the counter in run up to the results could also be trading bets by investors as on several occasions post results the counter has fallen and that too, steeply.

It stands true as before Infosys could come with its Q4 numbers large investors and traders had booked profits while counter was hovering around Rs 3,000 levels.

After almost an erosion of one-fifth of share value or over Rs 600 on the day Infosys came up with its Q4 numbers in April, stocks of the IT major had further tanked around 5% in the latter half of month. However, it found its bottom around Rs 2,200 and rebounded and move up steadily.

Table: Equity schemes'rising exposure in Infosys

Scheme	April (%)	May (%)	Change (bps)
Reliance Vision	3.42	4.37	95
HDFC Growth	6.98	7.91	93
Reliance Equity Opportunities	3.94	4.84	90
HDFC Taxsaver	8.04	8.80	76
Reliance Equity	5.56	6.17	61
HDFC Top 200	5.26	5.87	61
Franklin India Bluechip	5.90	6.46	56
HDFC Equity	5.45	5.99	54
Reliance Growth	3.92	4.42	50
Franklin India Taxshield	5.93	6.35	42
Franklin India Prima	5.28	5.62	34
Source: Value Research Online