HDFC Bank shares had their worst month in six years and most but two fund houses bought it

Shares of HDFC Bank Ltd., India’s largest private lender, were down over 15% in the month of March, marking their worst month since March 2020. Most of India’s domestic Mutual Funds utilised this opportunity to increase their stake in the lender, barring two fund houses, who pared their stake in the lender.

As per the data available on the Bombay Stock Exchange, the shareholding of Mutual Funds increased to 29.54% at the end of the March quarter, from 26.66% in December. Most of that increase came from the Foreign Portfolio Investor (FPI) selling, as their shareholding fell to 44.05% from 47.67% as of December 31 last year.

Among prominent fund houses who piled into HDFC Bank during the market correction, include SBI Mutual Fund, who bought shares worth ₹2,614 crore, ICICI Prudential MF, who made a ₹4,574 crore purchase, HDFC MF with a ₹985 crore buy, DSP MF who bet ₹753 crore in increasing its stake in the lender, according to a note from Nuvama Alternative & Quantitative Research.
However, while most funds piled into the stock during the correction, there were two funds who chose to go against the tide and ended up paring their stake in the lender.

While Axis Mutual Fund sold HDFC Bank shares worth ₹421 crore during the month of March, Kotak Mutual Fund sold shares worth ₹356 crore last month, according to the Nuvama Alternative note.

Retail shareholding has also seen an increase after falling to a 20-quarter low in the month of December. HDFC Bank now has 41.1 lakh retail shareholders, or those who have authorized share capital of up to ₹2 lakh, up from 35.39 lakh in December.

Shares of HDFC Bank ended 2.1% lower on Monday at ₹793. The stock is still down 22% from its recent 52-week high of ₹1,020.

Also Read: Here’s what Indian Mutual Funds bought and sold during the March market correction