What the Big-3 Mutual Funds bought and sold in December 2022

Passive funds saw strong inflows of Rs15,398 crore during December 2022. There are 2 points to note here. Firstly, the NFO collections were robust at Rs8,486 crore in November 2022, but these NFO flows were dominated by bond ETFs, multi-asset allocation funds and closed ended Fixed Term Plans (FTP).

Gross monthly SIP flows for December 2022 touched record highs of Rs13,573 crore, despite strong global headwinds. Investors are not only being added to SIPs (as evidenced by rising folios), but investors are also staying put through the highs and lows, although one must admit that the SIP stoppage ratio has gone up recently, probably due to uncertainty and higher inflation. The big question is what the big funds did with these flows. We look at portfolio shifts of 3 largest equity fund houses viz. SBI MF, ICICI Prudential MF and HDFC MF. 

Big 10 fund houses and the AUM they control

Before looking at what the mutual funds bought and sold in December 2022, here is the ranking of the top AMCs on equity AUM for the month.

Data Source: AMFI

In December 2022, equity fund AUM of major fund houses tapered as NFO flows were largely focused on the debt side while the markets ended in the negative in the month of December, leading to depletion in value. On equity AUM front, ICICI Prudential AMC maintained its gap over HDFC MF, while UTI and Nippon India Fund are moving up rapidly. Bancassurance names still account for half of the top-10 players. 

These top-10 AMCs account for over 90% of industry-wide equity AUM, and hence their actions are closely tracked by traders and investors. As a proxy, we look at the buy and sell actions of the 3 biggest AMCs by equity AUM for December 2022 viz. SBI MF, ICICI Pru MF and HDFC MF. Let us start with the biggest player in the Indian mutual fund segment.

SBI MF key trades in equity markets in December 2022

SBI Mutual Fund is the largest by overall AUM and equity AUM by a margin. In fact, the equity AUM of SBI MF at Rs4.66 trillion is more than the combined equity AUM of ICICI Prudential and HDFC MF as of end December 2022. The top equity holdings of SBI MF are ICICI Bank, Reliance Industries and HDFC Bank. Here are the major stocks that SBI MF bought and sold in the month.

In December 2022, IPO participation was back and they dominated the fresh purchases by SBI MF. Let us first look at the 2 fresh investments made by SBI Mutual Fund in the month of December into IPOs. SBI MF invested Rs92.08 crore in Sula Vineyards IPO and Rs82.56 crore in Elin Electronics IPO. Apart from these IPO investments, SBI MF also made fresh investments of Rs1.57 crore in Sagar Cements, Rs0.47 crore in BEML Ltd and Rs0.31 crore in UCO Bank. Apart from these fresh buys, SBI MF added to its existing positions in several stocks in December 2022. SBI MF added 349.71 lakh shares of Bank of Baroda, 127.50 lakh shares of Bank of India and 0.49 lakh shares of Sundaram Fasteners during the month. 

Let us now turn to the exits made by SBI MF in December 2022. During the month, SBI MF fully exited small positions in 3 stocks viz; Allcargo Logistics, NIIT Ltd, Saregama India Ltd and Shipping Corporation of India (SCI). There were also stocks where SBI MF reduced existing positions. In December 2022, SBI MF sold 5.72 lakh shares of Oil India Ltd, 1.99 lakh shares of Greenpanel Industries Ltd and 1.50 lakh shares of Happiest Minds Technologies.

ICICI Prudential MF key trades in equity markets in December 2022

ICICI Pru AMC is the second largest fund by overall AUM and equity AUM for more than two years now. Its equity AUM at Rs2.42 trillion makes it an influential player in the equity space. The top equity holdings of ICICI Prudential MF are ICICI Bank, HDFC Bank and Infosys. Here is a look at what ICICI Pru MF bought and sold in December 2022.

ICICI Prudential Mutual Fund was not active in the IPO market in December 2022. During the month, ICICI Pru MF made fresh investments in Rainbow Children’s Medicare Ltd of Rs131.97 crore. In addition, ICICI Prudential Mutual Fund also made small fresh investments in Repco Home Finance, BEML Ltd, Supreme Petrochem, Eureka Forbes and Lloyds Metals and Energy Ltd. The fund added to existing positions in several stocks. It added 17.98 lakh shares of Nippon Life Asset Management Ltd, 9.59 lakh shares of Sapphire Foods and 0.38 lakh shares of Lemontree Hotels Ltd.

Let us turn to stocks that ICICI Pru MF exited totally and where it reduced its stake. In December 2022, ICICI Prudential MF fully exited small residual holdings in four stocks viz; Dhanuka Agritech, SpiceJet Ltd, Strides Pharma Science Ltd and Vakrangee Ltd. There were also stocks where ICICI Prudential MF reduced holdings in December 2022. It cut its stake in Amara Raja Batteries by 2.86 lakh shares, Shipping Corporation of India by 0.12 lakh shares and Saregama India Ltd by 0.05 lakh shares. 

HDFC Mutual Fund key trades in equity markets in December 2022

HDFC Mutual Fund may have dropped to third position in equity AUM rankings, but at Rs2.17 trillion, its equity shifts still remain a key influencing factor in the markets. As of December 2022, the top equity holdings of HDFC MF were ICICI Bank, HDFC Bank, SBI, Infosys and Reliance Industries. 

HDFC MF was extremely active in IPOs. It made fresh IPO investments in Sula Vineyards Rs27.87 crore, Uniparts Ltd Rs27.27 crore and Landmark Cars Rs22.92 crore during the month of December 2022. In the secondary market, HDFC MF made fresh purchases of Motilal Oswal Financial Services worth Rs34.32 crore, Fortis Healthcare Rs25.69 crore and Credit Access Grameen Rs13.77 crore. It also made fresh purchases in smaller quantities in Vodafone Idea Ltd and Zydus Lifesciences Ltd. HDFC MF also used the volatility in select stocks to add more at lower levels. It added 8.48 lakh shares of L&T Finance Holdings, 2.07 lakh shares of NMDC Ltd and 1.98 lakh shares of Coromandel International.

Let us turn to stock exits. HDFC MF exited some of its small residual investments in its entirety. This include small quantities of Abbott India Ltd, Polycab India Ltd and Amara Raja Batteries Ltd. In addition, HDFC MF also reduced its positions in Indian Energy Exchange Ltd by 20.44 lakh shares, Adani Enterprises Ltd by 5.58 lakh shares and Berger Paints Ltd by 0.97 lakh shares.

That was the crux of the MF churn story in December 2022? Funds bought selectively in stocks where correction has been steep as well as in select IPOs. However, they also used the volatility to exit stocks where headwinds are strong or momentum is low. Despite headwinds, the bias appears to be towards domestic India based investment stories.