When we look at what funds shopped for in September, it was large caps that grabbed their attention.
In September 2008, net fund purchases amounted to Rs 2,143 crore. The major picks were ICICI Bank, Jai Prakash Associates, Tata Steel, Sterlite Industries (India) and Reliance Infrastructure. In ICICI Bank itself, funds made a total net purchase of Rs 526 crore.
While all the above mentioned scrips have got further battered in the recent meltdown, that has not stopped mutual funds from buying. The total net purchases made by funds from October 1 - 23, 2008, has been Rs 1,700 crore.
But the funds that shopped the most in September were from the Reliance Mutual Fund stable. These funds alone accounted for 30% of the total purchase in ICICI Bank and nearly 55% of the purchase in Jai Prakash Associates. The fund house is known for maintaining high cash levels at times and uses this to pick up stocks at opportune times. This certainly was one such occasion since the cash levels from August to September have dropped by 13%. Reliance Natural Resources, Reliance Growth and Reliance Equity saw a significant fall in their cash levels.
Reliance Growth made a big purchase in ICICI Bank (Rs 83 crore) while Reliance Natural Resources picked up Jai Prakash Associates, Sterlite Industries and Reliance Infrastructure, totaling Rs 332 crore. The purchases by Reliance Equity were spread across all these stocks.
Amongst other fund houses, Franklin India High Growth Companies and Franklin India Flexi Cap bought significant number of shares in ICICI Bank. ICICI Prudential Infrastructure bought shares worth nearly Rs 41 crore in Tata Steel and Rs 32 crore in Sterlite Industries (India).