MFs dump bluechips to meet redemption in equity schemes

Equity mutual fund managers have divested Rs 13,183 crore.

Equity mutual fund managers have divested Rs 13,183 crore during July-September 2010. The figure is significantly higher than the previous quarter (Rs 2,763 crore). They have reduced holdings in Sensex companies during the second quarter in as many as 19 Sensex companies on the back of redemption pressure. Retail investors have been booking profits on the back of a rise in equity market valuations.

In all,mutual fund houses held 238 crore shares of Sensex companies as on September 30,2010,against 186 crore shares on June 30,2010. Hero Honda Motors saw the highest drop in MF holdings.

Kishor P Ostwal,CMD of CNI Research said: Investors have been redeeming in the second quarter and mutual fund houses offloaded bluechip companies to arrange for such redemption. He said even corporate houses tend to withdraw surplus funds from mutual funds if they need it for their capital expenditures.

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According to an analysis of shareholding pattern of 30 Sensex companies,19 saw a decrease in their MF holdings in September quarter compared with the previous quarter.

Reliance Infra,Tata Power,ACC,HDFC,Reliance Industries,HDFC Bank,Hero Honda Motor,Reliance Communications and JP Associates were among them.

The second highest decrease in MFs stake was registered by Tata Power. The MFs share in Tata Power decreased from 6.16 per cent to 4.70 per cent in the second quarter. On the other hand,out of the 30 stocks,10 companies saw an increase in MFs stake. There is no change in MF holdings in case of Maruti Suzuki.

The MFs stake in SBI decreased to 4.08 per cent on September 30,2010,from 4.47 per cent on June 30,2010. HDFC Banks stake decreased from 3.98 per cent to 3.25 per cent during the said period.

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