smallcap stocks to buy: These smallcaps are seeing plenty of buying and selling by top funds

NEW DELHI: January saw domestic mutual fund managers add a couple of new midcaps and smallcap stocks to their portfolios while completely exiting a few others.

The portfolio rejig, carried out in the run-up to the Budget, took place amid a surge in flows into midcap and smallcap schemes.

SBI Mutual Fund, India’s largest mutual fund house by assets, bought 1,79,6000 shares worth Rs 48 crore in CDSL but completely exited Laurus Labs (7,58,000 shares), Blue Dart (1,01,000 shares), JK Tyre (16,37,000 shares) and Sobha (2,39,000 shares).

SBI MF managed equities worth Rs 1,93,581 crore as of January 31.

HDFC AMC, which manages Rs 1.54 lakh crore worth of stocks, entered La Opala RG by buying shares worth Rs 106 crore. It bought shares in small quantities in Radico Khaitan (2,52,000), Alkyl Amines Chemical (18,000 shares) and Motherson Sumi (20,000 shares) against nil exposure earlier. The fund house completely offloaded shares of NMDC (1,26,000 shares), Future Supply (14,000 shares), McLeod Russel (7,56,000), among others.

ICICI Prudential Life, the third-largest MF in terms of equity investment, bought smaller stakes in Sarda Energy (8,000 shares), Aarti Industries (1,000 shares) and Indiabulls Ventures, among others. It completely sold SIP Tech & Exports and Ampersand Software.

Nippon India MF bought shares of VST Tillers Tractors (2,00,000 shares), Ujjivan (46,000 crore), JK Lakshmi Cement (20,000 shares) and CPCL (50,000 shares and sold 22,00,000 shares in Federal-Mogul worth Rs 145 crore besides cutting exposure to JK Cements, Akzo Nobel and IDFC, by selling shares worth Rs 43 to Rs 87 crore, respectively.

Aditya Birla SL MF, the fifth largest fund house by equity exposure, bought Rs 93 crore worth of shares in Care Ratings, Rs 61 crore shares of SAIL and Rs 10 crore in Apollo Tyres. It completely sold out its holdings Ujjivan Financial (Rs 44 crore), Sundaram Finance (Rs 14 crore), Mindtree (Rs 13 crore) and Escorts (Rs 13 crore).

BCCL – Non Copyright

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The fund house infused about Rs 7,900 crore into equity funds in January, the highest inflow since August 2019. Inflows into midcap and smallcap funds picked up, with net inflows of Rs 1,798.16 crore and 1,072 crore, respectively.

“We expect the flows into mutual funds to gather further momentum in the coming months,” said G Pradeepkumar, CEO of Union Asset Management Company.

Sundeep Sikka, ED and CEO, Nippon Life India Asset Management said: “With the Budget and subsequent RBI policy leading to several structural changes, we will continue to stay optimistic on market outlook. Retail investors may continue to invest in the markets through SIPs while staying balanced in their investing approach between different asset classes,” he said.