Dalal Street's sharp U-turn costs investors Rs 2.5 lakh crore amid rising yields, Covid-19 cases

Tata Motors, in which ace investor Rakesh Jhunjhunwala bought a stake last year, appeared to be the favourite of fund managers in February. Cumulatively, the holding of all mutual funds in Tata Motors went up by 13.3 per cent on a month-on-month basis. HDFC Mutual Fund bought 74,09,000 shares while Canara Robeco bought 40,00,000 shares of the Tata Group company. Several brokerages have maintained a bullish view on the automaker, citing sales recovery, improving margin, thrust on EVs, and its plans to turn debt-free by FY24.

Mutual funds increased their holding in IndusInd Bank by 10.9 per cent, their second highest conviction bet in the month. Nippon India bought 18,98,000 shares of the blue chip, while UTI bought 257,000 shares and Invesco 11,40,000 shares. Last month, Morgan Stanley had retained its 'overweight' call on IndusInd Bank while global brokerage CLSA had recently maintained its bullish stance with a target price of Rs 1,325. In the last one year, the stock has gained about 55 per cent.

Fund managers raised their bets by 3.8 per cent on NTPC during the month. At least four mutual fund houses have exposure of more than 2 per cent in the PSU stock. NTPC was the seventh largest investment for HDFC Mutual Fund that bought 1,87,06,000 shares of the power major in February. Other buyers include Nippon India, ICICI Prudential, Aditya Birla Sun Life and Franklin. In the last one month, the stock has gone up by over 11 per cent but has underperformed the benchmark indices in 1-year, 3-year and 5-year timeframes.

Eicher Motors, the maker of Royal Enfield bikes, was the third largest buy for mutual funds as their investment in the stock shot up by 3 per cent. Besides other fund houses, Tata Mutual Fund bought 376,000 shares of the auto stock that has been underperforming after its Q3 results. In the last 1 month, the stock has lost over 2 per cent of its market value.

Mutual fund investments in Bajaj Finserv increased by 3.3 per cent last month. In its Q3 result, the NBFC reported a 15 per cent year-on-year rise in its consolidated net profit to Rs 1,290 crore, largely led by strong growth in the company’s general insurance and standalone operations. Having gained almost 6 times in the last 5 years, the stock has lost about 8 per cent of its value in the last 1 month.

Mutual funds dumped biscuit maker Britannia Industries in February like there was no tomorrow. Their holdings dropped over 12 per cent in the large cap stock that has failed to deliver positive returns in the last six months. Shares of the FMCG company had hit a 52-week high of Rs 4,015 on July 21. Analysts say the laggard can bounce back given its relatively cheaper valuations.

Fund managers chose to book profits in Aditya Birla Group's flagship metal company Hindalco Industries Ltd, whose share price has rallied about 2.8 times in the last one year. MF holdings in the metal stock dropped by over 11 per cent. ICICI Prudential sold 22,000,000 shares of Hindalco while Aditya Birla Sun Life got rid of 358,000 shares. SBI Mutual Fund, however, bucked the trend to buy 11,95,000 shares. Last month, Hindalco had announced that it will pay 8-10 per cent dividend from its consolidated free cash flow. The company had reported a 77 per cent jump YoY in its Q3 net profit.

India's largest two-wheeler maker Hero MotoCorp was the third most dumped stock by fund mangers as MF holding came down by 9 per cent. Although the auto stock has given 82 per cent return in the last one year, it has delivered a negative return of 6 per cent in the last one month. Hero MotoCorp, that surpassed the 100-million units cumulative production mark earlier in January, had posted a 13.7 per cent increase in its consolidated profit after tax at Rs 1,029.17 crore for the third quarter ended December 31, 2020.

Even as the telecom major Bharti Airtel returned to black in Q3 with a net profit of Rs 854 crore, fund managers did not appear to be bullish on the outlook of the stock as they sold 6.7 per cent of their holding. Airtel is among the top 10 holdings of several mutual fund houses like SBI MF, ICICI Prudential Mutual Fund, UTI MF, Mirae Asset, Aditya Birla Sun Life, Tata Mutual Fund and Sundaram. Kotak Mahindra Mutual Fund appeared to be the only bull as it bought 83,00,000 shares of Airtel. Amid tariff war in the telecom sector, the stock has lost almost 11 per cent of its market cap in the last one month and has failed to beat the benchmark in the last one year.