In July, mutual funds absorbed foreign portfolio investors’ (FPIs) sales of financial equities, with HDFC Bank being the largest buyer. Other banks followed, with purchases totaling Rs 2,143 crore, Rs 1,468 crore, and Rs 780 crore. ACE Equities reported that HDFC Bank was the biggest buyer of shares in mutual funds, valued at Rs 2,648 crore. Other notable acquisitions included RBL Bank, Federal Bank, Canara Bank, and IndusInd Bank. Other major banks were also sold.
FPIs sold banking shares in July for over Rs 7650 crore due to concerns about deposit growth, RBI’s tighter liquidity coverage, and muted earnings. Major banks faced Q1 difficulties due to declining margins and asset quality.
Piramal Enterprises, Shriram Finance, L&T Finance, and Aditya Birla Capital have all purchased finance equities by mutual funds, highlighting the RBI’s warning to banks about the widening loan and deposit growth discrepancy, which could have negatively impacted profitability.
In terms of mutual funds, HDFC Bank was the biggest buyer, having purchased shares valued at Rs 2,648 crore. Axis Bank, State Bank of India, Punjab National Bank, and Axis Bank came next, with purchases totaling Rs 2,143 crore, Rs 1,468 crore, and Rs 780 crore. Data shows that while foreign portfolio investors (FPIs) were selling banking equities in July because of worries about slowing deposit growth and muted earnings, mutual funds were supporting the purchasing activity.
In terms of mutual funds, HDFC Bank was the biggest buyer, having purchased shares valued at Rs 2,648 crore. Axis Bank, State Bank of India, Punjab National Bank, and Axis Bank came next, with purchases totaling Rs 2,143 crore, Rs 1,468 crore, and Rs 780 crore. According to information provided by ACE Equities, RBL Bank (Rs 410 crore), Federal Bank (Rs 402 crore), Canara Bank (Rs 270 crore), and IndusInd Bank (Rs 252 crore) were the other notable acquisitions. Mutual funds, meanwhile, sold shares of Kotak Mahindra Bank for Rs 1,750 crore and shares of ICICI Bank for Rs 2,031 crore.
However, according to NSDL statistics, FPIs sold shares in the banking and financial industry in July for a total value of more than Rs 7650 crore. According to experts, worries about deposit growth, the RBI’s proposed tighter liquidity coverage, and muted earnings were the reasons why FIIs were net sellers of banking equities. Major banks had difficulties in Q1 due to declining margins, deteriorating asset quality, and increasing provisions, particularly in the portfolios related to credit cards, personal loans, and agricultural.
Disclaimer: The opinions and advice on investments shared by Moneycontrol’s financial experts are their own. Users are advised by Investcorpus.in to consult with qualified professionals before making any investment decisions.
