Equity and equity-oriented mutual fund schemes continued to be net sellers for the eighth consecutive month in February as investors net sold Rs 4,534.36 crore worth of equity against a Rs 9,253.22 crore outflow in January. In the equity market, they had consistently sold for the ninth straight month in February despite the market hitting fresh record highs.
Mutual funds have net sold Rs 1.23 lakh crore worth of equity shares between June 2020 and February 2021, indicating that they may have turned cautious in a rising market driven by global liquidity. Over the same period, foreign institutional investors have net bought Rs 2.4 lakh crore worth of shares.
In February, the benchmark indices rallied 6 percent and the broader markets climbed over 10 percent, whereas between June 2020 and February 2021, the indices shot up over 51 percent with the BSE Midcap and Smallcap indices gaining 68 percent and 85 percent, respectively.
Also read - These large, mid & smallcap stocks saw maximum buying, selling by mutual funds in February
“Some meaningful consolidation of markets could lead investors to come back and make fresh allocations at some stage. There is general worry on valuations and the current rally possibly being unreal and therefore investors seem to be trying to time things in some way,” said Akhil Chaturvedi, Head of Sales & Distribution at Motilal Oswal Asset Management Company.
Mutual funds have made fresh buys in 12 stocks listed on Indian stock exchanges, including Garware Polyester, Heranba Industries, Jubilant Ingrevia, MTAR Technologies, Nureca, RailTel Corporation of India, Safari Industries (India), Suryoday Small Finance Bank and Suzuki Motor Corporation.
A close check on the above list indicates that mutual funds added five IPOs — Heranba Industries, MTAR Technologies, Nureca, RailTel Corporation of India, and Suryoday Small Finance Bank — in February. In total, they invested Rs 490 crore in these IPOs.
The biggest buying was seen in RailTel Corporation of India (Rs 282.35 crore), Suzuki Motor Corporation (Rs 186.48 crore) and MTAR Technologies (Rs 100.14 crore).
On the other side, mutual funds completely exited Fairchem Organics, Hindustan Media Ventures, Kanchi Karpooram, Precision Camshafts and Ultramarine & Pigments, said Dolat Capital.
In the Nifty50 space, the maximum buying was seen in Bajaj Finserv, BPCL, Coal India, Eicher Motors, GAIL, HUL, IndusInd Bank, ITC and JSW Steel, whereas Adani Ports, Asian Paints, Bajaj Finance, Divis Labs, Dr Reddy's Labs, Grasim Industries, HDFC, ICICI Bank and IOC witnessed the highest selling in February.
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