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Small cap and large cap stocks were the most bought categories by mutual funds in June. Mid cap stocks were the most sold stocks in June and more than 80% of the number of stocks sold were of Vodafone Idea. For more information about what mutual funds bought and sold in the month of June. Read on!

Large Cap Stocks

Kotak Mahindra Bank Ltd., Bharti Airtel Ltd., Hindustan Unilever Ltd. and Infosys Ltd. continued to be amongst the top four stocks bought last month. Mutual funds have spent around Rs 9,182.6 crores on the large cap category.

Except Kotak Mahindra Bank all the three stocks have beaten the benchmark on a year to day note, until July 15, 2020. HUL returned more than 18%, Infosys and Airtel returned a little more than 23%. Sensex has returned a negative of 12% during the same time period.

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Most Bought

Current SharesShares BoughtWorth of Shares
Company(lakhs)(lakhs)Bought (Rs Cr)
Kotak Mahindra Bank Ltd.1719.26198.752630.04
Bharti Airtel Ltd.4897.26265.931500.38
Hindustan Unilever Ltd.791.0056.871203.72
Infosys Ltd.4588.54129.14917.80
SBI Life Insurance Company Ltd.451.3496.48748.67
Source: Value Research

Most Sold

Current SharesShares SoldWorth of Shares
Company(lakhs)(lakhs)Sold (Rs Cr)
HDFC Bank Ltd.5464.20-81.30-823.97
Housing Development Finance Corpn. Ltd.1200.90-42.10-754.13
Reliance Industries Ltd.2598.01-41.55-678.21
Oil & Natural Gas Corpn. Ltd.5843.40-710.57-604.44
Larsen & Toubro Ltd.1774.16-55.81-520.76
Source: Value Research

Mid-Cap Stocks

Mid-Cap stocks took the most beating among the three categories. Of the Rs 1,814 crores worth mid cap stocks sold, Rs 468 crore-worth shares were sold of Vodafone Idea Ltd , which accounts for a little more than 25% of the total worth of stock sold in the mid cap category. In FY20, Vodafone Idea posted the highest ever quarterly loss by an Indian company. The loss it reported was Rs 73,878 crores.

Most Bought

Current SharesShares BoughtWorth of Shares
Company(lakhs)(lakhs)Bought (Rs Cr)
3M India Ltd.4.041.17213.16
Ipca Laboratories Ltd.259.2711.14177.64
Supreme Industries Ltd.193.8014.33157.37
Hindustan Petroleum Corpn. Ltd.1882.2459.84128.22
Motherson Sumi Systems Ltd.2473.95121.83118.25
Source: Value Research

Most Sold

Current SharesShares SoldWorth of Shares
Company(lakhs)(lakhs)Sold (Rs Cr)
Vodafone Idea Ltd.6673.96-4800.89-468.54
Info Edge (India) Ltd.103.12-8.97-243.97
AU Small Finance Bank Ltd.253.56-35.36-174.89
Trent Ltd.383.31-26.90-154.78
Steel Authority Of India Ltd.1114.80-491.36-151.28
Source: Value Research

Small-Cap Stocks

In the small cap category, around Rs 1,019 crores worth stocks were bought and Rs 763 crores worth small cap stocks were sold. Here are the top five stocks that were bought and sold.

Most Bought

Current SharesShares BoughtWorth of Shares
Company(lakhs)(lakhs)Bought (Rs Cr)
JM Financial Ltd.696.44367.82263.42
Metropolis Healthcare Ltd.54.3215.02215.22
Great Eastern Shipping Company Ltd.237.3758.35127.08
Lemon Tree Hotels Ltd.1295.03397.6598.84
eClerx Services Ltd75.1217.0172.95
Source: Value Research

 

Most Sold

Current SharesShares SoldWorth of Shares
Company(lakhs)(lakhs)Sold (Rs Cr)
Indostar Capital Finance Pvt Ltd.14.48-45.60-128.89
PVR Ltd.49.82-12.04-125.26
Deepak Nitrite Ltd.275.92-21.24-103.61
Dixon Technologies (India) Ltd.23.15-1.38-73.88
Gujarat Pipavav Port Ltd840.63-89.83-64.60
Source: Value Research

Why Does a Fund Manager Buy or Sell a Stock?

So if you have invested in a large cap fund, the fund manager will use the pooled money of investors like you, to invest in stocks of fundamentally strong large cap companies. Investing in equity funds is thus an easier way to invest in stocks as an expert handles the fund strategically.

An equity mutual fund collects money or investments from thousands of investors like you. Every equity mutual fund will have a fund manager. The fund manager, in order to achieve the investment objectives of the fund, take strategic calls of buying and selling stocks across sectors to maximise gains, based on the category the fund belongs to.

However, it is important to note that just because a fund manager decides to buy or sell a particular stock does not mean you need to imitate the same movement for your own stocks portfolio. Which stocks mutual funds bought or sold does not directly impact you.

The information presented above is just to keep you abreast with the happenings of the mutual fund industry so that you remain informed as an investor. A mutual fund manager buying a stock does not necessarily indicate it is a good stock. Similarly, mutual funds selling a stock or a particular category, mid-caps in this case, does not indicate the category is ‘bad’.

Fund managers are well equipped with technical knowledge of the markets and of the fund objectives. It is best to not copy their decisions. Always carry out your independent research when it comes to stocks and mutual funds and invest in alignment with your goals. 

How are Large-Cap, Mid-Cap and Small-Cap Companies Classified?

Here’s a classification of what the three variations of market capitalisation mean.These definitions have been provided by the Securities and Exchange Board of India.

Large Cap-Top 100 companies on the stock market are labelled as large cap companies

Mid Cap-Companies ranked from 101 to 250 are mid cap companies.

Small Cap-All companies that follow mid cap companies on the exchange from 251st position onwards are all small cap companies. 

Generally the market cap of all companies (listed or unlisted) may be in the following range

Large CapAbove Rs 20,000 crores
Mid CapRs 5,000-20,000 crores
Small CapUp to Rs 5,000 crores

Hope this was insightful!

Happy Investing!

Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.

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