ICICI Pru has just offloaded Airtel, Voda; picked bank, power, pharma stocks

ICICI Prudential Asset Management, India’s second largest money manager by assets, largely betted on select power, pharma, staffing, private banks and PSU stocks all through December, as the benchmark indices climbed record highs.

The fund house, however, offloaded shares in select telecom, auto and IT majors.

Overall, it increased stakes in over 350 companies from across sectors in December, and lightened positions in 145 others.


Ahead of the earnings season that kicked off last week, the investment team led by Executive Director and CIO Sankaran Naren added additional shares of Tata Power (2.65 crore), followed by Cadila Healthcare (59.71 lakh), M&M Financial Services (54.35 lakh), BHEL (45 lakh) and ONGC (36.37 lakh).

Tata Power shares fell 1.57 per cent last month, while those of M&M Financial Services and BHEL lost 8 per cent and 18 per cent, respectively, during the same period.

“While valuations of several PSU stocks are attractive, they have not recovered because there is a fear of disinvestment in March quarter. If that does not happen, PSUs could turn attractive,” Naren said about the PSU stocks last week.

ICICI Prudential AMC remained highly focused on the banking players during the quarter. It bought 17.38 lakh additional shares of RBL Bank and 13.24 lakh of HDFC Bank in December and added 12.61 lakh shares of IDFC First Bank, 10.57 lakh shares of YES Bank, 9.30 lakh shares of Punjab National Bank and 8.8 lakh shares of Federal Bank.

The buying of YES Bank shares was done by ICICI Pru’s passively managed index fund.

In an earlier interaction with ETNOW, Naren said banks are going to benefit from the easing of the corporate credit cycle and it is very important that the bankruptcy code delivers many judgments, which can reduce this problem.

Nifty climbed nearly 1 per cent during the month, as sustained inflows from foreign institutional investors kept the market upbeat through the month.

Among the second-rung stocks, ICICI Prudential added 5 to 12 lakh shares of NBFC player Motilal Oswal Financial Services, auto player Ashok Leyland, real estate major DLF, coffee major Tata Coffee and liquor major United Breweries.

“In mid- December, our market-cap model suggested that shares of smallcaps in the overall market-cap fell to 8 per cent, which is similar to the levels seen in 2013. This is after the stock rose as high as 18 per cent in 2017. Smallcaps are currently offering better margin of safety over largecaps in terms of risk spread. Our models are decisively turning more positive on smallcaps,” Naren said.

In the auto space, the fund house bought additional shares of M&M, Hero MotoCorp and Bajaj Auto. It also added 20,223 shares of Teamlease Services and 18.52 lakh of QuessCrop in the staffing space.

L&T, Zee Entertainment, Bajaj Finance, IndusInd Bank, City Union Bank, InterGlobe Aviation, Havells India and Berger Paints were among the other stocks in which ICICI Prudential bought additional shares during the month.

On the other hand, it offloaded some shares in select IT majors like Tech Mahindra and Infosys, construction firm NBCC, oil retailers IndianOil and BPCL, power major NTPC and telecom major Bharti Airtel and Vodafone Idea.

With a total asset under management (AUM) of Rs 3.65 lakh crore, the asset manager held nearly 550 stocks under various schemes as of December 31, 2019.