Indian mutual funds injected over ₹51,000 crore into ten prominent stocks during August, a significant movement in the domestic equity market. Life Insurance Corporation of India (LIC) and One 97 Communications (Paytm) were among the top beneficiaries of this substantial capital influx.
LIC Leads Mutual Fund Purchases
Life Insurance Corporation of India (LIC) emerged as the largest recipient, drawing a massive ₹24,862 crore from mutual funds in August. This buying spree coincided with the government's offer for sale (OFS) of a 6.5 percent stake in LIC, which garnered ₹31,514.89 crore. Despite the significant inflows, LIC's shares concluded August with a 1.58 percent decline.
HDFC Bank and Other Major Investments
HDFC Bank secured the second-highest mutual fund investment, with net inflows totaling ₹5,491.91 crore. This investment arrived as HDFC Bank shares experienced a 5.23 percent drop in August, following a 6.24 percent decline in July. Kotak Institutional Equities highlighted that several large-cap stocks, including HDFC Bank, are trading at attractive valuations despite their strong earnings per share (EPS) growth projections.
Other notable stocks that attracted substantial mutual fund buying include:
- Bharti Airtel: ₹3,870.10 crore, even as its shares fell 8.12 percent in the month.
- Dhoot Transmission: ₹3,130.76 crore, a newly listed entity from August 17.
- ASTER DM Quality Care Ltd: ₹2,966.99 crore.
- One 97 Communications (Paytm): ₹2,528.56 crore.
Both ASTER DM Quality Care Ltd and One 97 Communications saw significant block deals in August, which likely contributed to the mutual fund interest.
Broader Market Trends and Smaller Cap Inflows
Beyond these top performers, several other companies also received notable investments, each attracting between ₹2,076 crore and ₹2,436 crore in mutual fund buying. These included Coal India Ltd, Manipal Health Enterprises Ltd, Avenue Supermarts Ltd, and Tenneco Clean Air India Ltd.
August witnessed a continued surge in equity mutual fund schemes, with overall inflows reaching a four-month high of approximately ₹29,300 crore. Additionally, Systematic Investment Plan (SIP) flows achieved a new record of ₹32,300 crore for the month. Analysts at Nuvama noted that this trend reflects a strategic approach by investors, who are booking gains in small and mid-cap indices while consistently building equity exposure through SIPs.