DIIs: Pension funds and banks add quality stocks to expand equity assets in March

ET Intelligence Group: A sharp fall in quality stocks in March attracted domestic institutional investors (DIIs), including pension funds and bank treasuries. Their assets under management (AUM) grew by 6% and 48%, respectively, by the end of the month even as the total institutional AUM fell 22%, according to data compiled by ETIG from NSDL. The equity AUM of the pension funds and banks was Rs 50,431 crore and Rs 1,18,208 crore, respectively, in March. It together accounted for 3.1% of the total institutional equity AUM in India, 151 basis points higher year on year.

The institutional equity AUM at end of March 2020 was Rs 53.89 lakh crore. Of this, 32.8% was held by domestic institutions such as insurance companies, mutual funds, local pension funds and banking and financial institutions.

The DIIs invested Rs 55,597 crore in March 2020, the highest ever in a month, according to the ETIG database. It was Rs 6,375 crore short of the total money pulled out by the foreign portfolio investors (FPIS) during the month. Since 2008, there have been 17 instances when FPIs sold more than Rs 10,000 crore in a month. During 10 of such instances, DIIs invested more funds than what FPIs sold.

Local mutual funds deployed Rs 33,708 crore, the highest in a month, while insurance companies invested more than Rs 20,000 crore in March 2020. The domestic mutual funds benefited from the continued flow via systematic investment plans (SIP). Net inflows in the equity schemes touched a 12-month high of Rs 11,722 crore in March.