Domestic mutual funds net bought Rs 9,255 crore of stocks in 19 trading sessions. But this was significantly lower than the Rs 16,180 crore seen in February.
The Indian equity market fell by over 3 percent in March, and this was mirrored by a fall in mutual funds' assets under management (AUM), which fell to Rs 21.36 lakh crore from Rs 22.20 lakh crore recorded in February.
The equity AUM under, including equity linked savings schemes (ELSS), balanced funds, and other exchange traded funds (ETFs), came in at Rs 9.95 lakh crore, down from Rs 10.21 lakh crore seen last month. This is 47.9 percent higher than the Rs 6.73 lakh crore recorded in March last year.
Domestic mutual funds net bought stocks worth Rs 9,255 crore in 19 trading sessions. However, this was significantly lower than the Rs 16,180 crore seen in February.
First-time buys and sells
Fund managers bought 15 stocks for the first time in March, which includes numerous recently-listed stocks like Bandhan Bank, ICICI Securities, Bharat Dynamics, Sandhar Technologies, Lemon Tree, Mishru Dhatu Nigam, and Hindustan Aeronautics, among others.
Nearly Rs 1,300 crore was invested in Bandhan Bank alone, which listed on stocks exchanges on March 27. The bank focuses specifically on serving under-banked and under-penetrated markets, with close to a third of its banking outlets being located in un-banked rural areas.
As on December 31, 2017, 96.5 percent of the bank's gross advances were priority sector lending-compliant. It has a consistent track record of growing a quality asset and liability franchise.
Since March 31, 2016, the lender's gross advances (including IBPC/Assignment) have grown from Rs 15,578.44 crore to Rs 24,364.39 crore, as on December 31, 2017. Number of customers increased from 6.77 million to 11.99 million over the same period.
On the other hand, fund managers exited as many as 8 stocks for the first time, including Pokarna, Jay Bharat Maruti, Avadh Sugar & Energy, Welspun Corp, MBL Infrastructure, Hexa Tradex, Shreya Shipping, and Arvind Smartspaces.
Fund flows in March
Sequentially, AUM of equity funds decreased by 3.8 percent, or Rs 26,663 crore, to Rs 6.69 lakh crore in March. Of the total, AUM in ELSS decreased by 0.5 percent, or Rs 398 crore, to Rs 80,583 crore.
Equity funds saw a net inflow of Rs 2,954 crore, while ELSS saw a net inflow of Rs 3,703 crore. So the total inflow into equity mutual funds was around Rs 6,657 crore.
"The net sales were lower, but overall gross sales have been stable … a few categories such as Balanced ones have seen a hit. This is due to the overall correction in the market and the changes in tax situation as well," Ashwin Patni, Head - Products and Fund Manager, Axis Mutual Fund, told Moneycontrol.
"Having said that, right now there is no sign of worry and the situation continues to be robust. April (flows) so far look reasonable and there has been no dramatic change in gross sales," he said.
Fund of funds, gold ETFs, and income, liquid and gilt funds witnessed net outflows, while other categories of funds witnessed net inflows. Net outflow from the mutual fund industry stood at Rs 50,752 crore in March, as against a net inflow of Rs 12,091 crore in February.The month-on-month (MoM) decline mostly reflects an end-of-quarter phenomenon, wherein companies tend to redeem investments in liquid funds for advance tax payments. Data shows that of the last 21 end-of-quarter months, AUM declined in 20 of them, according to an ICRA report.