High conviction: MFs raised stake in these 43 stocks for 4 straight quarters

MUMBAI: Domestic mutual fund managers have been raising stake in 43 stocks listed on the National Stock Exchange for the past four straight quarters, in an indication of high conviction they have placed on the prospects of these companies.

The list is the longest in recent memory for the parameter, reflecting the broad nature of the ongoing bull market in Indian equities. Another example of the conviction that mutual fund managers have in the ongoing market rally is the fact that out of the 43 stocks, only two belong to the Nifty50 index – and HCL technologies.

Data set for this story included about 1,235 out of 2,730 companies listed on NSE, which have declared their June quarter shareholding to the bourses so far. Further, the companies where mutual fund holding was less than 2 per cent were excluded.

Most names in this high conviction list of mutual funds included stocks from the IT and healthcare sectors, two sectors where fund managers have been vocally bullish since the onset of the Covid-19 pandemic.

However, the biggest rise in holding by mutual funds over the course of the past four quarters happened in Matrimony.com – an internet play. Mutual funds raised stake in the online matchmaking company by 1,233 basis points over the past year.

The surge in MF holding in Matrimony.com reflected the conviction that fund managers have on a company that has done great business as Indians rushed to get married amid the uncertainty created by the pandemic.


The second biggest rise in holding was seen in midcap IT firm Birlasoft, which saw a 953 basis points rise in MF holding during the period mentioned. The midcap IT firm has been a revelation of the pandemic year, as it has benefitted from the resurgence in global demand for IT services.

The surprise name on the list is Indiabulls Housing Finance, a stock that had been written off by most analysts. MFs raised stake in the troubled housing finance firm by 278 basis points as they counted on the revival in the real estate market and improvement in the balance sheet of the company to boost stock returns going ahead.

Interestingly, despite the improvement in holding of state-owned companies in domestic MF portfolios over the past year, fund managers raised stake in only three state-owned companies for four straight quarters – Bharat Dynamics, Hindustan Aeronautics and NHPC.

Other prominent stocks that featured in the list included Gujarat Gas, Tata Communications, Radico Khaitan, Tata Elxsi and Sunteck Realty.