Tata Mutual Fund bets on select PSUs and corporate banks

Tata Mutual Fund is betting on divestment in PSUs and corporate banks to generate alpha in equity mutual fund schemes. It is a matter of time before the government thinks how it can get the maximum cash out of select PSUs. The government is already moving towards privatisation of BPCL and there are talks about some other companies as well.

“A slowdown in growth and a shortfall in tax collections could trigger the next round of privatization. Given the high fiscal deficit the privatisation theme could come back,” says Rahul Singh, Chief Investment Officer (Equities), Tata Mutual Fund. He believes select PSU pockets make sense looking at the government’s intention to privatise and monetize assets. The fund house has added stocks like BPCL, HPCL, NTPC, Power Grid and BHEL in its large cap fund portfolio.

In addition to PSUs the fund house finds value in corporate banks and the trio of ICICI bank, SBI and Axis constitute 25% of its large cap fund.