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Large-scale buying in Indian companies by mutual funds

Nilanjan Dey

Kolkata , Nov. 9

THE asset management space is agog at this moment, thanks to large deals by fund houses involving a number of companies.

Apollo Tyres, Phoenix Lamps, Jindal Saw and UTI Bank are among the companies whose shares have lately been accumulated by funds managed by the likes of UTI MF, HDFC MF and Reliance MF.

Among the smaller players, SBI MF has been particularly active. The mode of acquisition is common — market purchase. Sources attribute the trend to attempts by fund managers to shore up their holdings in key counters.

HDFC Multiple Yield, which is a debt-oriented hybrid scheme, has bought over 97,000 shares of Phoenix Lamps, accounting for 0.41 per cent of its paid-up equity. With HDFC Prudence (also a hybrid scheme, but with a larger equity component) already holding a substantial part of Phoenix Lamp's capital, the total shareholding by the fund house now stands at 5.23 per cent of the company. This is represented by nearly 12.5 lakh shares.

Jindal Saw, formerly Saw Pipes, which is currently trading at about Rs 395, has witnessed purchases by three Reliance MF schemes — Reliance Growth, Reliance Equity Opportunities and the recently-launched Reliance Tax Saver — as well as the portfolio management arm of Reliance. Their holding, after the deal, is well over 28 lakh shares, accounting for 5.93 per cent of the company's equity. Incidentally, Reliance portfolio management has bought 25,000 shares, aggregating to 0.05 per cent.

UTI MF, the top player in the asset management sector with nearly Rs 25,000 crore (as in end-October) under management, has taken a chunk of IFGL, the refractory manufacturer. This has come in the shape of more than a lakh shares, accounting for 0.29 per cent of the paid-up base. This has led to a higher holding of 5.26 per cent by UTI MF in the company. It has also turned its attention to UTI Bank, in which it has acquired 2.39 lakh shares. Again, the latest deal has resulted in a total holding of a little more than 5 per cent.

Three companies — Apollo Tyres, Raymond and KPIT Cummins — have seen buying by SBI MF in recent days. As for Apollo Tyres Ltd, SBI Magnum Multi Cap has taken 8 lakh shares amounting to 2 per cent-plus stake. SBI MF's holding, 7.2 per cent, is now through Magnum Multiplier Plus, Magnum Tax Gain, Magnum Contra and, of course, Magnum Multi Cap Fund.

In Raymond too, Magnum Multi Cap has obtained about 93,000 shares. Now five SBI MF schemes collectively hold 5.02 per cent in the company; these schemes are Magnum Multiplier Plus, Magnum Global, Magnum Balanced, Magnum Emerging Businesses and Magnum Mid Cap. The last two funds are of relatively recent origin.

With regard to KPIT Cummins as well, it may be mentioned that SBI MF has over 5 per cent of the company through various schemes. In quantitative terms, this is represented by more than seven lakh shares.

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