Mutual Funds exit PSUs like SJVN, IRCON in February, increase stake in PFC, IRCTC

India's Mutual Funds exited their positions in five state-run companies - SJVN Ltd. Bank of Baroda Ltd., SAIL Ltd., RITES Ltd. and IRCON International Ltd., according to a note by Nuvama Alternative & Quantitative Research.

Some funds also pared their existing positions in PSUs like NHPC, Oil India and NALCO.

While SBI Mutual Fund has exited stocks like SJVN and Bank of Baroda, Quant MF has exited SJVN, RITES and IRCON. Mutual Funds owned stakes ranging between 0.5% to 8.6% in these names as of December 31, 2023.

Shares of SJVN declined 8% in February and have corrected over 35% from their peak of ₹170. However, shares of Bank of Baroda and RITES had gained between 5% to 7% that month.

ICICI Prudential MF, while exiting some PSUs has also trimmed its existing positions in stocks like NHPC and Oil India. On the other hand, SBI MF has pared its stake in NALCO. Based on the December shareholding pattern, the SBI Arbitrage Opportunities Fund had a 3.65% stake in NALCO.

While SBI and Quant MF have exited certain PSUs, they have also bought fresh stake in state-run companies like PFC, Bharat Electronics and Container Corporation. Other funds have also purchased stake in PSUs during February.

In the above list, barring PFC and IRCTC, which declined 9.6% and 5.1% respectively in February, the other four names saw gains ranging from 10% to as high as 30% in the case of Oil India that month.

While these count as new purchases, Mutual Funds have also topped up their exposure in certain PSU names. Stocks like BHEL, BPCL, and PFC have seen fund houses park money in February.

The Nifty PSE index is trading with losses of over 2% in Wednesday's trading session. All 20 constituents of the index are trading with losses. The index has corrected 7.3% from its peak of 9,731 which it hit last week.