Banks and IPOs attract money from MFs in October


MUMBAI : Inflows into equity mutual funds declined in October, but sectors such as autos and banking remained attractive to fund managers. Newly listed stocks such as Nykaa and Fino Payments also received mutual funds during the month.

In October, MF’s exposure to private banks reached a five-month high of 17.7%, increasing 90 basis points (bps) from the previous month and 10 bps from the same period in October. last year, according to data from the Association of Mutual. Funds in India (Amfi) and NAV India analyzed by Motilal Oswal Financial Services Ltd. Exposure to the private banking sector was at a 29-month low at 16.8% in September.

Likewise, the weighting of public sector banks (PSBs) jumped to a 20-month high of 3.5%, gaining 30 basis points from the previous month and 150 basis points from the corresponding period of the previous year. During the month, Nifty Bank was up 4.52% while Nifty Private Bank was up 4% and Nifty PSU Bank was up 14%.

Most private banks saw a steady pickup in lending growth in the second quarter of FY22, driven by the portfolios of individuals, small and medium-sized enterprises and merchant banks, while the growth of the portfolio of business has been largely subdued, as the recovery of the private investment spending cycle will take a little longer. time, Motilal Oswal Financial Services said.

Other sectors that received mutual funds in October were capital goods and cement. Entry into sectors such as healthcare, consumer, utilities, oil and gas, technology, chemicals, infrastructure and consumer durables moderated, according to the analysis.

During October, the weighting of health care among FPs moderated for the third consecutive month to a 20-month low at 6.9%, falling 30 basis points from September and falling by 30 basis points from September. 150 basis points in October of last year. The Nifty Healthcare index slipped 4% during the month.

Inflows into equity investment funds continued to decline for the third consecutive month, although monthly contributions through systematic investment plans (SIPs) increased, according to data from Amfi. FCP shares received ??5,079.16 crore in October, down 21% from September, when it recorded the smallest net inflow in the past three months. Monthly contributions to the SIP have been ??10,518.53 crore in October, compared to ??10,351.33 crore the previous month.

With limited initial public offerings (IPOs) in October, the deployment of the MF in shows has only been ??881 crores. Of the total, Nykaa’s parent company, FSN E-Commerce Ventures Ltd, received ??678 crore and Fino Payments obtained ??203 crore, said Abhilash Pagaria, analyst at Edelweiss Alternative Research.

“Mutual funds have used the recent rise of names like IRCTC, Tata Power Co, Mindtree and SRF as an opportunity to downsize. These names were on a phenomenal boost due to the potential entry of MSCI. Now that the announcement has been made, the adjustment will take place on November 30, when the passive trackers of the MSCI Standard Index add them, ”Pagaria said.

The IRCTC has been on a bull run since the start of this year. In October, its stock jumped 11%, up 194% in 2021 so far.

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