Buying action in smallcap stocks: Mutual funds bullish on these shares

During the first month of the year of January 2023, smallcap stocks Sula Vineyards, Amara Raja, EPL, Hindustan Copper are among the counters that witnessed buying acting from the top domestic mutual fund houses, as per data by domestic brokerage and research firm ICICI Securities. 

The analysed data suggests that South Indian Bank Ltd, Hindware Home Innovation Ltd, Sula Vineyards Ltd, Amara Raja Batteries Ltd, EPL Ltd, Elin Electronics Ltd, Hindustan Copper Ltd, Kalpataru Power Transmission Ltd, Jubilant Ingrevia Ltd, and IIFL Finance Ltd have been the top ten smallcap stocks buys across asset management companies (AMCs) in the previous month.

Meanwhile, the top sells in the smallcap category by mutual funds have been Heritage Foods Ltd, Indiabulls Housing Finance Ltd, Tata Metaliks Ltd, Route Mobile Ltd, Sunteck Realty Ltd, Minda Corporation Ltd, Computer Age Management Services Ltd (CAMS), Disa India Ltd, KFin Technologies Ltd, and Stove Kraft Ltd.

Driven by buoyant systematic investment plan (SIP) flows, equity mutual funds have attracted 12,546 crore in January, making it the highest net infusion in four months, despite volatility in stock markets.

This was way higher than 7,303 crore inflow seen in December, 2,258 crore in November and 9,390 crore in October. Prior to that, equity mutual funds witnessed flow to the tune of 14,100 crore in September. This was also the 23rd straight month of inflows into equity-oriented mutual fund schemes, data with the Association of Mutual Funds in India (Amfi) showed.

The mutual fund industry Assets Under Management (AUM) was marginally down to 39.62 lakh crore in January-end from 39.89 lakh crore in December-end. Of this, equity AUM stood at 15.06 lakh crore and debt AUM at 12.38 lakh crore.

“Mutual fund investments are acting as a counterbalance to foreign portfolio outflows,” N.S. Venkatesh, chief executive officer of AMFI said, adding that over 900,000 new investors have poured money into mutual funds in January. “The rise in equity mutual fund inflows in a volatile market shows that investors have reposed their faith in equities as a wealth creator and multiplier,” Venkatesh said.

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