ICICI Prudential, India’s fifth biggest mutual fund by equity holdings, increased its cash holdings in May by selling most of its holdings in Bharti Airtel and much of its holdings in ONGC, Crompton Greaves, Cairn India, Hindalco and SJVN, publicly available numbers revealed.
Mutual funds typically increase cash holdings when they expect share prices to correct, or when fresh cash inflows outpace the rate at which they can make investments.
The overall trend in the Indian mutual fund industry from April to May was towards having more cash.
ICICI Prudential was the most aggressive of the Indian mutual funds, with its cash holdings rising to 8% of its total equity portfolio, up from 6% in April. In all, it added 1,237.5 cr to its cash holdings during the month — the highest addition by far.
With 3,923.3 cr, ICICI Pru also ended up having the highest cash holdings of all Indian mutual funds.
Another aggressive mover into cash was SBI Mutual Fund. As of end-May, SBI had 1,559.5 cr in cash, which formed 7% of its equity portfolio size. End-April, SBI Mutual Fund had just 904.8 cr, or 4% of its portfolio, in cash.
The biggest player in the industry, HDFC Mutual fund, did not make any big share-to-cash switch, with its cash ratio remaining at 2% of total equity holdings. HDFC’s cash reserves in its equity funds increased to 1593.4 cr from 1,120.3 cr that it had at the end of April.
Reliance Mutual Fund also increased its cash to 1,204 cr from 768 cr in the previous month.
ICICI PRU STOCK CHURN
The most aggressive mover, ICICI Pru, got rid of most of the shares it held in Bharti Airtel. It sold 82 lakh shares of the telecom operator in May, ending up with just 65 lakh by the end of the month.
The mutual fund completely exited six stocks, including Prestige Estate Projects, Oberoi Realty, JK Lakshmi Cement, Jet Airways and Adani Enterprises.
Another stock that fell out of favor with ICICI Pru during the month was Crompton Greaves. It cut its holdings by about 30% to 1.1 cr shares.
ICICI also slashed its holdings in stocks such has ONGC, Rain Industries, Hindalco, SJVN etc.. (see chart below.)
| STOCK | TOTAL HOLDING | CHANGE |
| Bharti Airtel Ltd. | 6500706 | -8194790 |
| SJVN Ltd. | 25357211 | -5791325 |
| Crompton Greaves Ltd. | 11304172 | -5169702 |
| Oil & Natural Gas Corporation Ltd. | 9725948 | -3905990 |
| Rain Industries Ltd. | 23688759 | -3707156 |
| Hindalco Industries Ltd. | 14113253 | -3348347 |
| Cairn India Ltd. | 7026627 | -2159185 |
| Jaiprakash Associates Ltd. | 23374585 | -2000000 |
| Container Corporation Of India Ltd. | 1342441 | -1854258 |
| Reliance Industries Ltd. | 13194620 | -1442288 |
| DCB Bank Ltd. | 8192488 | -1273895 |
| Prism Cement Ltd. | 6565431 | -1217243 |
| TVS Motor Company Ltd. | 329958 | -1200000 |
| Tata Global Beverages Ltd. | 15156027 | -1047253 |
| Kalpataru Power Transmission Ltd. | 3552025 | -1000000 |
| City Union Bank Ltd. | 18129694 | -672806 |
| Idea Cellular Ltd. | 5870166 | -631675 |
| Aban Offshore Ltd. | 2498042 | -602251 |
On the positive side, ICICI Pru increased its exposure to NTPC by about 40% to 3.8 cr shares. It also tanked up on IDFC, Tata Motors, Vedanta Ltd, Power Grid Corp, NCC etc.. (see chart below).
| STOCK | TOTAL | CHANGE |
| NTPC Ltd. | 38131368 | 11271169 |
| IDFC Ltd. | 19193070 | 7125987 |
| Tata Motors Ltd. | 23782400 | 6409991 |
| Vedanta Ltd. | 6629204 | 4935494 |
| Power Grid Corporation Of India Ltd. | 122000424 | 4557420 |
| NCC Ltd. | 6509107 | 4404072 |
| Steel Authority Of India Ltd. | 26894427 | 3851741 |
| Gujarat Mineral Development Corporation Ltd. | 10420381 | 3609233 |
| Bharat Heavy Electricals Ltd. | 10505927 | 3135259 |
| ICICI Bank Ltd. | 78452766 | 2286882 |
| HDFC Bank Ltd. | 31653601 | 2164254 |
| Rallis India Ltd. | 6668919 | 1446869 |
| Bank Of Baroda | 4012744 | 1421523 |
| Coal India Ltd. | 3834627 | 1401862 |
| Punjab National Bank | 20175753 | 1296708 |
| Tech Mahindra Ltd. | 19451251 | 1279248 |
| Mahindra & Mahindra Financial | 1176801 | 1125938 |
| Apollo Tyres Ltd. | 12232655 | 1086340 |
Among the newly entered stocks were DCM Shriram and Arvind Infra.
HDFC CHURN
Among the new stocks that it bought during the month were DCM Shriram and Arvind Infrastructure.
Meanwhile, the biggest player in the equity mutual fund industry, HDFC, also got rid of nearly half of its holdings in a telecom player – Idea Cellular.
HDFC Mutual Fund cut the number of Idea Cellular shares it held by 66 lakh to 73.8 lakh. It also sold 12.3 lakh shares of Bharti Airtel, though it still held about 3.9 cr shares in the company at the end of the month.
HDFC MF was, however, far less aggressive than ICICI Pru in terms of churn. The next big ‘out move’ it made was in Zee Media Corp — the news arm of Zee group. It lost 33.8 lakh shares in the stock to bring down total exposure to 2.0 cr shares. (see chart below)
| STOCK | TOTAL | CHANGE |
| Idea Cellular Ltd. | 7382629 | -6596197 |
| Zee Media Corporation Ltd. | 20374783 | -3384150 |
| Cipla Ltd. | 9374620 | -1402158 |
| Bharti Airtel Ltd. | 39127166 | -1250956 |
| Power Grid Corporation Of India Ltd. | 23667076 | -1194074 |
| Aurobindo Pharma Ltd. | 12902341 | -832000 |
| Housing Development Finance Corporation Ltd. | 6693817 | -794280 |
| Reliance Industries Ltd. | 15237491 | -685466 |
| Hindustan Media Ventures Ltd. | 2746380 | -357862 |
| Tata Consultancy Services Ltd. | 1345136 | -331144 |
| UPL Ltd. | 7152300 | -322000 |
| Voltas Ltd. | 9800400 | -257000 |
| ACC Ltd. | 1344488 | -244749 |
| IndusInd Bank Ltd. | 2473383 | -228832 |
| Torrent Pharmaceuticals Ltd. | 2879100 | -224650 |
| Amara Raja Batteries Ltd. | 2600000 | -204000 |
| SKF India Ltd. | 2533437 | -155340 |
| Aditya Birla Nuvo Ltd. | 82160 | -153995 |
HDFC completely exited only one stock during the month – Pantaloons Fashion and Retail – by selling all 1 lakh shares it held in the company.
On the positive side, it more than doubled its exposure to Tata Motors by buying 40.6 lakh shares and taking its total holding to 72.7 lakh shares.
It also made a similar aggressive move towards MEP Infrastructure Developers, Cummins India and Chennai Petroleum. (see chart)
| STOCK | TOTAL | CHANGE |
| Axis Bank Ltd. | 25400851 | 4971184 |
| Union Bank Of India | 26308658 | 4436000 |
| Tata Motors Ltd. | 7270859 | 4055960 |
| MEP Infrastructure Developers Ltd. | 6907486 | 3830386 |
| Punjab National Bank | 46595128 | 3002004 |
| Tata Steel Ltd. | 20416799 | 2840427 |
| Bank Of Baroda | 101664811 | 2752528 |
| ICICI Bank Ltd. | 129596114 | 2466568 |
| State Bank Of India | 156390577 | 2211316 |
| ITC Ltd. | 25489316 | 1921356 |
| Chennai Petroleum Corporation Ltd. | 2309900 | 1704400 |
| Cummins India Ltd. | 1507000 | 1500000 |
| Sadbhav Engineering Ltd. | 12058223 | 1412000 |
| HDFC Bank Ltd. | 14554907 | 904328 |
| Shriram Transport Finance Company Ltd. | 900500 | 733000 |
| Coal India Ltd. | 5830651 | 574650 |
| Yes Bank Ltd. | 3205348 | 524476 |
| Hexaware Technologies Ltd. | 5300000 | 500000 |
HDFC MF increased its exposure to Infosys, while cutting it for TCS. It also newly entered Cognizant Technology Solutions by buying 1.92 lakh shares of the US-listed company. Other new entries included PNC Infratech and Ramco Industries.