SBI Mutual Fund picks more midcaps and smallcaps

NEW DELHI: Fund managers at SBI Mutual Fund continued to accumulate smallcaps and midcaps and dumped big names from the Nifty pack in November, as they saw limited upsides in largecaps after a record rally since March.

The fund house went all out for NHPC, buying over 1 crore shares of the hydroelectric power generator. Power consumption in the country has grown past pre-Covid level with projections for further growth. This has made analysts bullish on the sector.

“If I have to look at it from a two-three years’ perspective, the power sector could be a great turnaround story from the current level. We were power deficit once, but are now in power-surplus mode,” said Yogesh Mehta, Founder of Yield Maximisers.

Besides NHPC, SBI MF grabbed 10-55 lakh shares of Federal Bank, V-Guard Industries, Finolex Industries, Firstsource Solutions and Prism Johnson in November. It also shopped for Solar Industries, Crompton Greaves, ICICI Lombard GE T&D India and IDFC First Bank from the broader market.

“The broader market continued to look better placed relative to largecaps, thanks to extreme polarisation. We continue to go bottom-up in our approach by focusing on resilient businesses that should emerge stronger on the other side of the current uncertainty,” said SBI Mutual Fund.

Navneet Munot, its chief investment officer, has quit the fund house and has been appointed the new CEO and Managing Director of HDFC Mutual Fund, the No. 3 fund house.

The fund house added after the strong bounceback in stocks from March 2020 lows, it will require strong growth and an earnings rebound beyond the reopening-led normalisation for the market to see further upside.

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SBI Mutual Fund, the largest fund house in the country, dumped some of the biggest names from elite Nifty50 club, especially banking stocks. It sold 10-35 lakh shares in Axis Bank, Adani Ports, Kotak Mahindra Bank, Power Grid Corporation, Reliance Industries, Bharti Airtel, M&M and L&T.

It did pick selective largecap stocks, which have been laggards in the ongoing stocks rally. They included Gail India, SBI, Hindalco and ITC.

ITC has recently started seeing major breakouts after underperforming its peers for months. It is still the cheapest FMCG player available among largecaps, and continues to grab eyeballs when everything else has become expensive.

SBI Mutual Fund also built fresh positions in Gland Pharma, Ingersoll-Rand, Shreno and Sobha in November. At the same time, it completely exited Apollo Tyres, GE Power India and Kirloskar Ferrous Industries.

Meanwhile, the fund house further strengthened its lead over its peers in terms of asset managed. It now manages assets worth Rs 4.67 lakh crore, up by Rs 34,000 crore in a month, some of which could be mark-to-market gains.


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