The stocks of Reliance Industries Ltd (RIL) and Reliance Communications seem to be the darling of fund managers this year. A total of 364 MF schemes have invested heavily in the stocks of these two companies, belonging to the Reliance Group and the Anil Dhirubhai Ambani Group (ADAG), respectively.
The number of schemes investing in the stocks of RIL has increased by 18.23%. As on October 2007, around 201 MF schemes had holdings in RIL stocks and its total value was pegged at Rs 7,572.64 crore. Data collated by Value Research show that in October 2006 only 170 MF schemes, putting in Rs 3,542.73 crore, invested in RIL. Reliance Communications is also among the preferred companies. The number of MF schemes holding stocks of Reliance Communications has increased by around 50%. From around 109 schemes worth Rs 1,513.36 crore invested in this company last year, it has increased to around 163 schemes in 2007 totalling Rs 3,774.39 crore.
“Fund managers love to park their money in stocks which provide them with cushion in a bearish market by providing them liquidity,” said Krishnan Sitaraman, head, financial sector rating, Crisil. He added that even on the debt side, fund managers will put their money in companies, which are AAA rated, giving them a high degree of safety. Companies like RIL, ICICI or SBI provide just that.
This year, Larsen & Toubro (L&T), which was not among the favourites of fund managers last year, has replaced Grasim Industries among the top 10 holdings. Around 135 MF schemes have increased their exposure in the stocks of L&T and the total value of these investments stands at Rs 4,399.76 crore as on October 2007.
Grasim has witnessed a dip of 2.27% in 2007 from 135 schemes, valuing Rs 2,376.06 crore invested till October 2006, to 132 schemes this year. ICICI Bank, which has around Rs 4,297.42 crore investments from 152 MF schemes, and State Bank of India (SBI), which has around Rs 3,692.10 crore investment from 162 MF schemes, also attracted the fund managers’ attention.