MFs add shares of Indigo, Paytm, PVR & Nazara Technologies among others in February

• Inflows into equity oriented mutual funds, at ₹15,686 crore, hit a nine-month high in February, .
• According to ICICI Direct Research, in large caps, fund houses bought Indigo, GAIL, Dabur India, Tata Motors among others while mutual funds sold Adani stocks.
• Fund houses also bought mid cap stocks like Paytm, Biocon, Coforge, Dr Lal Pathlabs while they sold Vodafone Idea, IDFC First Bank and Canara Bank.

Despite the volatility seen in equities in the month of February, mutual funds have continued to buy stocks, thanks to steady monthly inflows.

The Sensex slipped 1% in February because of the Adani Group crisis that impacted investor sentiment and triggered a sell-off. Yet, inflows into equity oriented mutual funds hit a nine-month high in February with an infusion to the tune of ₹15,686 crore.

Fund houses bought into large cap stocks like Indigo, GAIL, Dabur India, Tata Motors among others. At the same time, they sold Adani stocks like Adani Enterprises, Adani Ports and SEZ, Ambuja Cements, Adani Total Gas among others, according to ICICI Direct Research.

High inflows were seen in thematic and small cap funds at ₹3,856 crore and ₹2,246 crore respectively. Mutual funds’ interest in mid and small caps has been growing in the last three quarters.

Inflows via systematic investment plans (SIP) were also consistent except they fell marginally to ₹13,686 crore in February against ₹13,856 crore in January 2023, according to data from the Association of Mutual Funds in India.

Top 10 large cap buys	Top 10 large cap sells
Interglobe Aviation	Adani Ports & SEZ
GAIL (India)	Vedanta
Macrotech Developers	Ambuja Cements
Tata Motors	Tata Power Company
Tech Mahindra	Adani Enterprises
LTIMindtree	Bank of Baroda
Dabur India	UPL
Info Edge (India)	Adani Total Gas
Havells India	Dr Reddy’s Laboratories
Hindustan Zinc	Tata Elxsi

Source: ICICI Direct Research

Going small
In the last few months, mutual funds have been buying mid and small-cap stocks. Interest in mid and small caps has been growing in the last three quarters – while smallcap funds saw net inflows of ₹15,172 crore, midcap funds had inflows of ₹14,632 crore.

Large-cap funds witnessed inflows worth less than half of the mid and small cap funds — at ₹6,392 crore in the last three quarters.

Key mid cap stocks that mutual funds bought in the month of February include Paytm, Biocon, Coforge, Dr Lal Pathlabs while they sold Vodafone Idea, IDFC First Bank and Canara Bank.

Top buys in mid caps	Top sells in mid caps
Syngene International	Vodafone Idea
Star Health and Allied Insurance Company	CG Power and Industrial Solutions
One97 Communications	Sun TV Network
Biocon	IDFC First Bank
Coforge	Colgate-Palmolive (India)
3M India	Indian Railway Finance Corporation
HDFC AMC	Steel Authority of India
Gujarat Fluorochemicals	Canara Bank
Dr Lal Pathlabs	The Phoenix Mills
Blue Dart Express	Aditya Birla Capital

Source: ICICI Direct Research

Analysts say that midcap and small-cap indices have been doing well post the lows hit during Covid times. They delivered better returns than the top 100 companies and that’s what has been driving inflows into these sectors.

In the small cap category, mutual funds bought PVR, Nazara Technologies, Kaynes Technology while they sold ICICI Securities, CarTrade Tech, Easy Trip Planners.

Top 10 small cap buys	Top 10 small cap sells
Heritage Foods	ICICI Securities
PVR	CarTrade Tech
Indiabulls Housing Finance	Anand Rathi Wealth
Zensar Technologies	Greaves Cotton
Safari Industries (India)	Anupam Rasayan India
Syrma SGS Technology	DCX Systems
Privi Speciality Chemicals	Data Patterns (India)
Aavas Financiers	National Aluminium Company
Kaynes Technology India	Easy Trip Planners
Nazara Technologies	Prudent Corporate Advisory Services

Source: ICICI Direct Research

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