Stocks that mutual funds bought/sold in November 2022

Mutual fund flows continue to be robust and active equity funds saw net inflows for the month of November 2022. Even the passive flows actually flattered and SIPs infused close to Rs. 13,306 crore in the previous month. The million dollar question what did the mutual fund do with all the funds. Obviously, mutual funds are churners and they buy and sell stocks based on opportunities. Here is how the mutual funds churned their holdings in the month of November 2022.

How Mutual Funds overall bought and sold stocks in November 2022

Here is a macro view of how mutual funds as an investment class bought and sold stocks in the month of November 2022. To avoid having to juxtapose apples and oranges, we look at how the mutual funds invested in large caps, mid-caps and small caps separately. For simplicity, we use the same definition used by SEBI to classify on market cap.

1. We start with the large cap stocks. For the mutual funds, the preferred large cap stocks for November 2022 were Nykaa, Vedanta, Paytm and Zomato. There were also buyers in Tata Steel, Bandhan Bank and ICICI Prudential Life. Clearly, mutual fund have shown a preference for the digital names which had come out with IPOs in the last one year. Most of these stocks have corrected sharply from their IPO levels and the post-IPO peaks. Mutual funds also showed some buying interest in metal stocks. On the sell side; mutual funds sold stocks like UPL, Berger Paints, Piramal Enterprises, HDFC Life, Dabur Adani Enterprises, Reddy Labs and HCL Tech. The bias was stock specific, focusing on companies where stock prices had rallied sharply in the recent past.
    

2. In the mid-cap space, there was a lot of buying interest in mid-sized financials. Mutual funds were buyers in stocks like Union Bank, Bank of India, Shriram Transport Finance and Aditya Birla Capital. There was also buying interest visible in select digital stocks in the mid-cap space like in Delhivery and Policybazaar. Overall, the buying theme was centred around under-priced digital stocks and financials where there had been qualitative improvement in earnings in the second quarter. On the sell side, FPIs sold mid-cap stocks like BHEL, IRFC, Tube Investments, LTTS, Indian Hotels, Aurobindo Pharma and Vodafone Idea. The focus of mid-cap selling was again focused on stocks that have rallied sharply in the last few months.
    

3. Finally we come to the small caps. There were several stocks where the mutual funds were aggressive buyers. For instance, mutual funds were buyers in Intellect Design, Pricol, Phillips Carbon Black, Strides Pharma, IIFL Finance, Amara Raja Batteries and TCPL Packaging. Small caps are normally focused alpha creators and the selection was largely stock based only. Among the major sell candidates in the small cap space were Fino Payments Bank, IIFL Wealth, HEG, Rain Industries, Easy Trip Planners, Indigo Paints etc. The funds also sold out on defence stocks like Cochin Shipyards and Mazagon Docks which have been in the midst of a frenetic rally in the last few months.

What the Big-3 Funds bought and sold in November 2022

Here we focus on what the three largest funds in India by AUM viz. SBI MF, ICICI Prudential MF and HDFC MF bought and sold in the month of November. To avoid getting too micro, we will only stick to the large cap names where they churned aggressively in November.

• For the month of November, SBI Mutual Fund expanded its holdings in several key stocks For instance, SBI Mutual Fund enhanced its exposure to HDFC Bank, HDFC Ltd, Infosys Ltd, SBI and Bharti Airtel. At the same time, SBI Mutual Fund also cut its positions in stocks like ICICI Bank, Kotak Mahindra Bank, Axis Bank and ITC.
   

• Let us now turn to what ICICI Prudential Mutual Fund did in the month of November 2022. ICICI Prudential Mutual Fund enhanced its exposure to stocks like Axis Bank and NTPC in a rather substantive way. At the same time, the fund also cut is exposure to stocks like ICICI Bank, HDFC Bank, Infosys Ltd, Reliance Industries Ltd, Bharti Airtel, ONGC and State Bank of India.
   

• We now turn to the third largest fund by AUM i.e. HDFC Mutual Fund. This fund added its exposure to ICICI Bank, HDFC Bank, Axis Bank and NTPC. NTPC and the banks appear to be common adds for the major funds. At the same time, the fund also cuts its positions in stocks like SBI, HDFC Ltd, Reliance, L&T and ITC Ltd.