With the recovery in the Indian equity indices over the last few months, stocks have again become an attractive investment option. And mutual funds are back in the Street. Little surprise then that the market capitalisation of MF stakes in 25 major industrial houses increased by a whopping 175% to Rs 56,198 crore on December 7 2009 from Rs 20,433 crore on December 5, 2008.
The benchmark BSE Sensex almost doubled during this time, from the 8,000-levels in December 2008 to its close of 16,983 on December 7, 2009.
The share of market capital of mutual funds in total M-cap of 25 industrial houses increased from 6.18% to 7.17% during the period, with MFs incresing their stake in 18 of the top 25 industrial houses.
According to CNI Research chairman and managing director Kishor P Ostwal, ?In the last one year, the market was quite shaky, and because of the global meltdown there were no business opportunities for expansion or vertical growth. As a result, cash-surplus corporates put in excess liquidity in mutual funds with a precondition that the funds in turn support their share prices. The huge inflow in mutual funds is a result of this and consequently, the investment of mutual funds have gone up.?
The top five houses in terms of MFs? market capitalisation on December 7, 2009 were the Tata Group, Reliance Industries Ltd, Sterlite, AB Management Corporation and Om Prakash Jindal.
Among the 25 industrial houses, mutual funds? investment in Sterlite, Mahindra, Bajaj, UB, Torrent, Essar, Shriram Thyagaraj and Hinduja have seen more than 300% increase.
On the other hand, less than 100% increase in M-Cap of MFs was seen in the case of Reliance Industries led by Mukesh Ambani, ADAG, Munjal (Hero) and Dabur group.
Among the top 25 industrial houses, the highest share of mutual funds in the total market cap on December 7 was seen in the case of Avantha Group, followed by Subhash Chandra, K K Birla, Hinduja and UB group.
