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IRCTC and others: Mutual funds decrease exposure to these 10 midcap stocks

The reduction in stake may mainly be to take some profits off the table in an overheated equity market

October 21, 2021 / 12:45 PM IST
The Indian equity market has registered an unprecedented rally over the past 1.5 years, despite multiple headwinds. Indices hit fresh record highs each day, with Sensex crossing the 61,000-mark and Nifty 50 surpassing the 18,000-mark, thanks to the improved economic sentiment. Experts believe that though the momentum is expected to continue, the stocks are over bought and their valuations are trading above the long-term averages. Given the overheated sizzling market, investors tend to press the exit button in stocks to take profits off the table. Here is the list of the top ten midcap stocks where mutual funds cut their exposure significantly in September.  Stocks are shortlisted based on the change in the number of shares and change in the number of schemes that held the stocks over the past month.
Over the last one year, the stock of IRCTC delivered a splendid return of 377 percent. Schemes that exited totally from IRCTC in September include Aditya Birla SL PSU Equity, PGIM India Midcap Opportunities, Motilal Oswal Equity Hybrid, Nippon India Focused Equity and Mirae Asset Equity Savings Fund.
2 Sun
The media stock put up a tepid show over the last one year by gaining only 29%. Schemes that pruned exposure significantly in Sun TV in September include Aditya Birla SL Balanced Advantage, Kotak Balanced Advantage, DSP Equity Savings, Quant Quantamental and PGIM India Balanced Advantage Fund. Meanwhile, schemes that increased allocation in the stock include Edelweiss Equity Savings, Quant Large & Mid Cap, Quant ESG Equity, Quant Absolute and SBI Balanced Advantage Fund.
3 Lal
The pharma stock was a multi-bagger since its March 2020 lows  and has since risen more than 300 percent. Schemes that exited totally are Canara Rob Equity Hybrid, Canara Rob Flexi Cap, DSP Healthcare and UTI Value Opp Fund. Meanwhile Tata Quant Fund added this stock afresh in September.
4 Petro
Its stock performance was sub-optimal over the last one and three year as it delivered an absolute return of four and nine percent respectively. Petronet LNG was one of the five stocks removed from the Nifty next 50 and Nifty 100 indices in September. It reflected in the portfolio of the index funds tracking these indices. Apart from those, ICICI Pru Multi-Asset, Navi 3 in 1 and Nippon India Vision totally exited. On the other hand, schemes like Templeton India Equity Income and Taurus Ethical Fund increased investment in the stock.
5 Godr
Schemes that exited totally from Godrej Properties in September were DSP Equity Opportunities, L&T Large and Midcap, Taurus Ethical and Taurus Tax Shield Fund. Schemes that cut exposure in the stock significantly include L&T Tax Advt, Taurus Discovery (Midcap), Baroda Multi Cap and Edelweiss Flexi Cap Fund.
6 Tata Ele
Tata Elxsi was a multibagger stock that gained more than 550 percent in the last three years. Schemes such as Taurus Discovery (Midcap), IDBI Small Cap, IDBI Hybrid Equity, Edelweiss Large Cap and Taurus Ethical Fund cut their allocation into the stock significantly in September.
Performance of the stock of MRF was suboptimal over the last three years that delivered return of 35 percent (point-to-point return). MRF was one of the five stocks removed from Nifty next 50 index and Nifty 100 index in September. Index funds tracking these indices followed suit. Apart from these, schemes like IDBI Long Term Value and Kotak Flexicap Fund lower their holding in the stock in September.
8 Alkem
ALKEM, the second largest trade generics player in India, delivered mediocre performance over the last one year by gaining only 44 percent. The stock was exited from the Nifty next 50 index and Nifty 100 index in September. Index funds tracking these indices too removed the stock from their portfolios. The other schemes that reduced their holding in the stock such as ICICI Pru Exports & Services, PGIM India Flexi Cap, Motilal Oswal Flexi Cap and ICICI Pru Bluechip.
Stock of TVS Motor Company delivered a tepid show by gaining only 29 percent past year. Schemes that exited totally in September were Aditya Birla SL Equity Hybrid '95, DSP Dynamic Asset Allocation, IDFC Regular Savings and Tata Ethical Fund.
10Aditya bir
Over the last three months, the stock of Aditya Birla Capital corrected 13 percent. Nippon India Equity Savings and Quant Active Fund exited totally while schemes like Quant Mid Cap and Nippon India Equity Hybrid pruned exposure in the stock.
Dhuraivel Gunasekaran
first published: Oct 21, 2021 09:45 am