Ever since the equity markets tanked in January, stocks from almost all sectors have been predictably offloaded by mutual funds in huge numbers. The carnage has spared no sector but however, amidst this chaos, there have been a few stocks that have actually managed to lure fund managers towards them.
Interestingly, a majority of the funds' major purchases were from the top 30 stocks. Of the 851 stocks held by mutual funds at the end of June, the top 30 stocks accounted for 50 per cent of the assets held. 12 of these stocks did not figure in the 30-share Sensex.
| Company | Current Investment ( Rs Cr) | * Shares Bought (Rs lakh) | **Inflow (Rs Cr) |
| Bharti Airtel | 3,011.11 | 135.51 | 1,063.89 |
| Bharat Heavy Electricals | 2,421.08 | 43.31 | 810.35 |
| Infosys Technologies | 2,849.00 | 49.28 | 893.67 |
| Larsen & Toubro | 2,774.80 | 26.21 | 797.26 |
| HDFC | 1,522.67 | 29.00 | 745.32 |
| ICICI Bank | 2,927.99 | 63.38 | 744.41 |
| Tata Consultancy Services | 1,370.33 | 55.21 | 536.88 |
| Tata Steel | 1,971.76 | 61.09 | 447.89 |
| Oil & Natural Gas Corpn. | 2,218.83 | 46.52 | 469.62 |
| Punj Lloyd Ltd | 744.39 | 127.55 | 216.43 |
| Dr. Reddy's Laboratories | 797.78 | 64.92 | 390.76 |
| Reliance Industries | 6,314.26 | 15.86 | 382.79 |
| Satyam Computer Services | 1,180.31 | 79.89 | 352.44 |
| Axis Bank | 1,136.31 | 34.92 | 264.76 |
| I T C | 1,531.32 | 117.23 | 239.97 |
| * As on June 30, 2008 ** Between Jan- Jun, 2008 | |||
Now let's take a look at the top stocks which were stacked up by funds in the last six months.
The biggest purchase in terms of number of shares was Bharti Airtel. Funds had significantly increased their exposure to this large-cap telecommunication company, purchasing shares worth Rs. 1,064 crore between January and June. The stock was held by 131 funds at the end of December, but this number increased to 180 at the end of June despite the fact that during this time, the stock's price was down by 27 per cent.
Funds also increased their exposure to major tech companies, Infosys Technologies, Satyam Computer Services and Tata Consultancy Services. Funds bought shares amounting to nearly Rs 894 crore in Infosys Technologies in the last six months. The price of the stock was down by only 2 per cent during the time.
Apparently, funds saw a major buying opportunity in the stock as it become more popular with 50 funds adding it to their portfolios by the end of June. Tata Consultancy Services and Satyam Computer Services also attracted attention with shares worth nearly Rs 537 crore bought in the former and worth Rs 352 crore bought in the latter. 33 funds added Satyam Computer Services and 28 added Tata Consultancy Services to their portfolios. Both these stocks fell by much lesser than the market in the last six months.
Banking and financial services stocks were also in demand. Shares of Housing Development Finance Corporation and Axis Bank were bought in huge amounts while ICICI Bank got a mixed response.
Funds stacked up the stock in the initial months of the year but cut down their exposure later on, as news of Credit Derivative losses and Subprime crisis weakened their faith in the once favourite banking stock. But funds bought the stock with a renewed interest in June, when it was available at the lowest price.
Among basic engineering stocks, funds indulged heavily in Bharat Heavy Electricals, buying shares worth nearly Rs 819 crore. The price of the stock was down by 46 per cent in the last six months.
Diversified company, Larsen & Toubro also maintained buying interest in the falling market. Funds bought shares worth nearly Rs 804 crore in the company in the last six months when its price was down by 48 per cent.
Pharma stocks, Dr. Reddy's laboratories and Divi's Laboratories were also bought in significant numbers. Dr. Reddy's Laboratories also found its way into 20 funds' portfolios while Divi's Laboratories got 14 new takers. While Dr. Reddy's Laboratories had curtailed its fall to 9 per cent, Divi's Laboratories has lost 28 per cent in the last six months.
Energy stocks, Reliance Industries and Oil & Natural Gas Corporation also lured funds into heavy buying. 19 funds added Oil & Natural Gas Corporation and 23 funds added Reliance Industries to their portfolios by the end of June. Oil & Natural Gas Corporation had lost 34 per cent while Reliance Industries had shed 27 per cent in the market downturn.
