Suzlon Energy, YES Bank, RVNL, Paytm shares saw MF inflows in Oct; here's list of midcap stocks they sold

Suzlon Energy Ltd, YES Bank Ltd, Rail Vikas Nigam Ltd (RVNL), One 97 Communications Ltd (Paytm) and Vodafone Idea were among 56 of Nifty Midcap 100 constituents where mutual funds (MFs) increased exposure in October, as funds tried to make most of fall in stocks during the month.

SAIL Ltd, Bandhan Bank, Escorts Kubota and Tata Elxsi Ltd were some of the stocks they sold in the month gone by.

MF holding in Bank of Maharashtra, in terms of shares held, was up 215.80 per cent month-on-month (MoM) over the September figure amid possible value buying, as the stock tumbled 9 per cent for the month. Domestic funds held Rs 310 crore worth 5.62 crore BoM shares at October end.

IDFC First Bank saw MF holding rising 69.5 per cent MoM amid 11 per cent drop in the stock price. Funds held 32.59 crore IDFC First Bank shares worth Rs 2150 crore at the end of October. Tata Chemicals, Aditya Birla Capital and Poonawala Fincorp saw MF holding rising 17-22 per cent in terms of number of shares they held, data compiled by MOFSL suggested

Paytm was up 10 per cent, yet it saw number of shares that MFs held increasing 16.7 per cent MoM. BSE also gained 21 per cent, yet saw MF buying.

In the case of railway stock RVNL, shares MF held in the PSU jumped 13.3 per cent MoM amid 11 per cent slide in its share price. Vodafone Idea saw MF buying amid a 22 per cent decline in October. YES Bank, Suzlon Energy, Ashok Leyland, KPIT Technologies and Indraprastha Gas were some of the stocks seeing MF buying in October amid up to 25 per cent decline in their share prices.

On the flip side, SAIL saw MF selling amid 18 per cent slide on the counter. The institutional category held Rs 2,200 crore worth SAIL shares after cutting exposure by 14.4 per cent in terms of shares held. MF selling shares in Bandhan Bank may have contributed 8 per cent slide on the counter in October. Escorts Kubota also fell 12 per cent amid MF selling.
Petronet LNG, Torrent Power, Exide Industries, Voltas, Tata Elxsi, Kalyan Jewellers India and Indus Towers were among stocks that saw selling in October amid reduction in MF exposure.

Ashish Gupta, CIO at Axis Mutual Fund noted that the supply of equity in the form of IPOs and stake sales since FY24 has been 1.5 times the net inflow into mutual funds. The impact of this on the market direction was masked as FII flows over the last 18 months (April 2023 to September 2024) had been positive at over $35 billion, which aided in absorbing the increased supply.

Assuming secondary sales (by promoters and PEs) at $22 billion in H2 stays similar to what India witnessed in the first half, the total supply will rise to $55 billion in the second half of the year or about 2.5 times the estimated inflows in mutual funds, Gupta noted.

Domestic flows are necessary but no longer sufficient, said Ashish Gupta, CIO at Axis Mutual Fund.