Most mutual fund managers added shares of fraud-hit Punjab National Bank (PNB) to their portfolios in February amid a 40 per cent slide in the counter. A total of 1.7 million shares of the state-owned banks were added to by equity MFs, data shows.
Put together, the number of shares in fund managers' holdings, in the end of February, stood at 233.8 million against 232.1 million in the preceding month of January.
Several of the large equity schemes have taken quite a sizeable exposure to the bank in terms of number of shares, data shows.
The overall allocation to PNB in terms of assets, however, is marginal to substantially impact the performance of the top schemes, given their huge asset size.
"We did not expect the free fall to be so fast and so steep. Even we had wanted to liquidate, time was too short but loss on the counter too big to easily digest. It was only when shares cracked below Rs 125 that we started buying," said a fund manager.
However, fund managers have their fingers crossed at this juncture. Some say, it looked like a good value buying.
According to them, if their bets go as expected, this buying may reward them heavily in the next 1-2 years time horizon.
Industry insiders told Business Standard that one reason why fund managers chose not to sell PNB was the timing. "If they had sold later, when damage was already done, they would have hit their own portfolio further. I believe, if fund managers had acted as sellers later, the stock could have hit all the way down to Rs 60-70, or may be more."
Large and established schemes like HDFC Equity, HDFC Mid-Cap Opportunities, HDFC Top 200, HDFC Tax Saver and Aditya Birla Sun Life Frontline Equity, among others, preferred to remain invested as there was no change in the number of shares in their holdings. However, they had to face the loss in the value of these investments.
Schemes like Reliance Tax Saver, HDFC Prudence and Kotak Equity Arbitrate Regular Plan, rather, added PNB shares in their portfolios. On the other hand, schemes like funds like Reliance Vision and Franklin India High Growth Companies liquidated PNB shares from their portfolios.
The total number of MF schemes with exposure to PNB shares fell in February to 94 from 116 in the previous month. This means over 20 schemes altogether exited the counter. The value of total investment in PNB dropped by nearly 39 per cent from Rs 39.36 billion in January to Rs 23.92 billion last month.
Put together, the number of shares in fund managers' holdings, in the end of February, stood at 233.8 million against 232.1 million in the preceding month of January.
Several of the large equity schemes have taken quite a sizeable exposure to the bank in terms of number of shares, data shows.
The overall allocation to PNB in terms of assets, however, is marginal to substantially impact the performance of the top schemes, given their huge asset size.
"We did not expect the free fall to be so fast and so steep. Even we had wanted to liquidate, time was too short but loss on the counter too big to easily digest. It was only when shares cracked below Rs 125 that we started buying," said a fund manager.
However, fund managers have their fingers crossed at this juncture. Some say, it looked like a good value buying.
According to them, if their bets go as expected, this buying may reward them heavily in the next 1-2 years time horizon.
Industry insiders told Business Standard that one reason why fund managers chose not to sell PNB was the timing. "If they had sold later, when damage was already done, they would have hit their own portfolio further. I believe, if fund managers had acted as sellers later, the stock could have hit all the way down to Rs 60-70, or may be more."
Large and established schemes like HDFC Equity, HDFC Mid-Cap Opportunities, HDFC Top 200, HDFC Tax Saver and Aditya Birla Sun Life Frontline Equity, among others, preferred to remain invested as there was no change in the number of shares in their holdings. However, they had to face the loss in the value of these investments.
Schemes like Reliance Tax Saver, HDFC Prudence and Kotak Equity Arbitrate Regular Plan, rather, added PNB shares in their portfolios. On the other hand, schemes like funds like Reliance Vision and Franklin India High Growth Companies liquidated PNB shares from their portfolios.
The total number of MF schemes with exposure to PNB shares fell in February to 94 from 116 in the previous month. This means over 20 schemes altogether exited the counter. The value of total investment in PNB dropped by nearly 39 per cent from Rs 39.36 billion in January to Rs 23.92 billion last month.
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