MFs made fresh entry into 15 stocks, including 6 IPOs, and exited 7 in September

Mutual fund houses remained net sellers in equities for the fourth consecutive month in September but heavy outflow seen in equity and equity-oriented schemes in July and August considerably slowed down during the month gone by, Association of Mutual Funds in India (AMFI) data shows.

Fund houses sold equities worth Rs 22,856.38 crore during the September quarter and have been net sellers so far in October as well. Sebi's move on Multi Cap funds could be the reason for outflow, experts feel.

"The assets continued to move out of multicap category, which was the worst hit during the month. While the category has been witnessing net outflows since June, Sebi's recent guideline around the investment mandate for the category could have also contributed towards the net outflow this month. The other categories which witnessed net outflows are largecap and value/contra funds," Himanshu Srivastava, Associate Director – Manager Research at Morningstar India told Moneycontrol.

During September, equity-oriented mutual funds witnessed a net outflow of Rs 734.4 crore, which is sharply lower than the net outflow of Rs 4,000 crore witnessed in August.

The asset management companies made fresh entry into 15 stocks in September, which is nearly double compared to the previous month (August) when they picked up a fresh stake in just eight stocks, as per Dolat Capital's data.

Six of the new stocks bought by MFs were the firms that came out with their initial public offering including Angel Broking, Chemcon Speciality Chemicals, Computer Age Management Services (CAMS), Happiest Minds Technologies, Route Mobile and UTI Asset Management Company.

AMCs also acquired fresh partly paid-up equity shares of Reliance Industries, Aditya Birla Fashion and Retail, EIH and Satin Creditcare Network. Alok Industries, IOL Chemicals & Pharmaceuticals, Ravinder Heights, Shilpa Medicare and Suzuki Motor Corporation were other stocks where mutual funds made a fresh entry last month.

However, they completely exited seven stocks in September, against just four stocks in August.

Associated Alcohols & Breweries, Future Lifestyle Fashions, Jyoti Structures, Max India, Quantum Information Systems, Shivalik Rasayan and Shree Renuka Sugars are seven stocks where the AMCs exited from.

The number of folios, as well as funds mobilised during September, was higher than August, and the redemption amount too came down.

"This indicates that while there are investors who chose to book profit given the surge in the equity markets across segments in the recent times, there are set of investors who have started to invest in the markets as well. The markets also corrected mid-month which would have also given a good investment opportunity for investors," Himanshu Srivastava said.

Overall the equity market closed the September month in red with Nifty50 losing over a percent after reporting 19 percent rally in the previous three months. Hence, the profit booking was on expected lines.

In the Nifty50, the highest buying by mutual funds was seen in Adani Ports, Bajaj Auto, Bajaj Finance, Bharti Airtel, Cipla, Divis Labs, Dr Reddy's Labs, HDFC Life Insurance, ITC, M&M and Tech Mahindra, Dolat Capital said.

However, the selling was seen in Asian Paints, Axis Bank, Bajaj Finserv, GAIL, HDFC Bank, HUL, ICICI Bank and Titan Company, the brokerage added.