Raghunandan Money – Investment Khushiyon Ka.

Indian stocks that mutual funds exit from

Published : September 5, 2017

INDIAN STOCKS THAT MUTUAL FUNDS EXIT FROM

Indian Stocks Post Top MF Exits Likely to Correct

Indian Stocks holding by individual investors depends on many factors and exiting on proper time is must to reap optimal benefit from such investment. The sample study of top 12 Mutual funds schemes quarterly portfolio reveals that post complete exit, the Indian stocks shows corrections, baring few, and hence should cautiously be handled by investors. For the present study first quarter of FY 2017 was taken as time period.

Indian stocks promises better return among all option available to most of the investors. But potential of timely portfolio review is quite low mainly due to lack of expertise in exit strategy by an individual investors. So quarterly, half yearly or annual review of portfolio is preferred by most of them, especially at the time when corporate announces their results. During his/her whole investment cycle an investor intricate within stocks performance for judging whether to buy, hold or exit from any one of the stocks.

The present quarterly analysis of the portfolio of Top twelve Mutual Funds schemes will help investors come out from the intricate situation of stocks most likely trend in near termThe selection of these top performing twelve Mutual funds schemes is discussed elsewhere in the blog.  This may help them take timely exit decision in particular, as the analysis hints for correction in the sample study of stocks that top MF schemes exited in quarter ending July 2016.

Indian Stocks MF Exited in First Quarter 2016 

Twelve top Mutual fund schemes have exited from twenty one stocks completely in quarter ending June 2016. Investors should keep an eye on these stocks and should take timely decision on whether to exit or hold these stocks in their portfolio. These stocks include Astral Poly Technik Limited, Hindustan Sanitaryware Indus Ltd, Indian Hotels Company Ltd, IDFC Bank Ltd, SKS Microfinance Ltd, Hindustan Dorr-Oliver Ltd etc.

For instance in Hindustan Sanitaryware Indus Ltd two different MF schemes had a total holding of 3038694 shares as on March 2016 and both of these schemes have exited in quarter ending June 2016. Similarly, in Indian Hotels Company Ltd two other MF schemes had a total holding of 5351984 shares as on March 2016 and both sold their full holdings in quarter ending June 2016. In rest of stocks one mutual fund scheme had holding as on March 2016 and that scheme completely sold out these stocks.

Indian Stocks Dumped by MF in Q1 16 Under-performing

Coming on stocks performance post exit by those MF schemes, Astral Poly Technik Limited could not sustain above 504 levels and started falling thereafter from July 2016 on-wards. The stock continued correction till now. Similarly Navkar Corporation Ltdshowed correction in its prices after it had been dropped by mutual fund schemes. Indian Hotels Company Ltd is another stock which was dumped by mutual fund portfolio in Q1 2016. The stock touched 143 levels in July 2016, but thereafter it is trading around 126 levels post exit.

On the other hand few stocks were such, which though did-not corrected yet did-not perform well as well, after exit. Ceat Ltd is one such example which showed better performance despite exit by MF schemes. This may be due to fact that total income for Q1 2016 (Rs.1455.81 crore) rose by 4% as compared to that of previous Q4 2015 (Rs.1391.41 Crore). Similarly Dr. Lal Pathlabs Limited didn’t get affected by dumping by MF as the net profit for Q1 2016 rose to Rs 37.55 crore as compared to Rs. 32.47 crore in Q4 2015. For HCL Technologies net profit for Q1 2016 rose to Rs 1799.29 crore from Rs 1671.51 crore in Q4 2015. Due to this the stock did not showed correction post mutual fund exit.

All these Indian stocks have been sold off completely by the sample of mutual fund schemes under study in Q1 2016. So investors should keep an eye while analyzing these stocks in their portfolio, as most of the exited stocks showed correction. It might be possible that some stocks that did not corrected and as stated above, reason being several other factors affecting their prices, such as good quarterly results. So an investor must link these exit with other current factors affecting any stock under consideration before arriving at any conclusion on their investment related decisions in such Indian stocks.


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