{"id":185997,"date":"2023-11-16T13:43:01","date_gmt":"2023-11-16T13:43:01","guid":{"rendered":"https:\/\/indiansapidnews.com\/?p=185997"},"modified":"2023-11-16T13:43:01","modified_gmt":"2023-11-16T13:43:01","slug":"mutual-funds-invested-in-nearly-1000-companies","status":"publish","type":"post","link":"https:\/\/indiansapidnews.com\/india\/mutual-funds-invested-in-nearly-1000-companies\/","title":{"rendered":"Mutual Funds Invested In Nearly 1,000 Companies"},"content":{"rendered":"
The number of companies had touched a low of 792 in July 2020 amid heightened uncertainty because of COVID-19.<\/strong><\/p>\n A mid rising inflows into equity funds, India’s mutual fund industry has increased the number of companies it is investing in to nearly 1,000.<\/p>\n A large number of stocks in which it has invested in have a low free float and show signs of limited liquidity, according to a Business Standard<\/em> analysis of data from tracker primemfdatabase.com<\/em>.<\/p>\n Assets under management (AUM) rose to nearly Rs 48 trillion in September, with more than half of the money invested in equity funds.<\/p>\n The number of companies had touched a low of 792 in July 2020 amid heightened uncertainty because of COVID-19. It has largely gone up since then.<\/p>\n Equity mutual funds are invested in 983 stocks as of September 2023. This is the highest in 88 months (since 2016).<\/p>\n <\/p>\n Mutual funds have to increasingly deal in smaller companies as they expand their portfolio and deploy higher funds, shows an analysis across all the 983 companies.<\/p>\n According to fund managers, they are on a constant look out for fresh opportunities to generate better returns.<\/p>\n Rise in the number of stocks is also due to cap on maximum holdings in a single stock and liquidity issues.<\/p>\n “The growing size of funds and search for newer opportunities leads to an increase in the number of stocks.<\/p>\n Addition of new stocks also become important if the existing stocks in the portfolio do not have enough liquidity to absorb further inflows or the holdings may have become a much larger portion of the total market-cap of the company. Also, as fund managers we look to add new,” said Chirag Mehta, Chief Investment Officer at Quantum AMC.<\/p>\n The median company among the top 100 holdings had a market capitalisation of nearly Rs 90,000 crore (Rs 900 billion).<\/p>\n This dropped to around Rs 32,000 crore (Rs 320 billion) for the next 100 and less than Rs 6,000 crore (Rs 60 billion) for anything beyond (ranked 201-983).<\/p>\n Free float refers to shares in the hands of the public and available for trading.<\/p>\n <\/p>\n The top 100 holdings had a median free float of nearly Rs 43,000 crore (Rs 430 billion). This fell to less than Rs 15,000 crore (Rs 150 billion) for the next 100.<\/p>\n Stocks beyond this had a free float of around Rs 2,000 crore.<\/p>\n Investor interest in smallcap funds have surged in the last one year, propelling the fund category to the top in AUM rankings from fifth in September 2022.<\/p>\n The AUM of the fund category has jumped 61 per cent in one year to Rs 1.98 trillion.<\/p>\n This is owing to consistent inflows and a rally in stock prices.<\/p>\n On an average, investors have poured in Rs 2,850 crore into smallcaps during the last one year.<\/p>\n <\/p>\n Feature Presentation: Aslam Hunani\/Rediff.com<\/em><\/strong><\/p>\n