Mutual Funds Increase Stake in Select PSU Stocks by Over 4%
Assets under management of the mutual fund industry stood at nearly Rs.67.1 trillion as of September 2024, marking a marginal 0.6% growth from the earlier month. Equity funds as a whole grew by Rs.1,074 billion, balanced funds by Rs.167 billion, and others through other ETFs by Rs.159 billion during the month.
Several PSU stocks have witnessed mutual funds boosting their stake by more than 4% YoY. Among those, the three key companies have recorded a high rise in investments by mutual funds.
Oil India Limited
Oil India Limited saw a decline of 2.3% in the morning session on the BSE at Rs.521.6 on the day, with a market capitalization of Rs.85,120.4 crores. Year-over-year, the shareholding of the company in the hands of mutual funds grew 2.38% from 5.22% in Q2 FY24 to 7.6% in Q2 FY25. It has given multi-bagger returns since its recent fall; over the last year, it has risen 155.7% and, as of now, the year-to-date gain stands at 107.7%.
The firm reflected good financial progress with the revenue of operations up by 30.8% year-over-year at Rs.8,120 crores in Q1 FY25, from Rs.6,208 crores in Q1 FY24. In the period, its net profit was also up by 44% from Rs.1,399 crores to Rs.2,016 crores. Oil India Limited engages in the exploration, development, and production of crude oil and natural gas, in addition to LPG transportation and production. The company also provides the services of exploring and producing oil blocks.
Bank of India
Bank of India, with a market capitalization of Rs.47,302.2 crores, saw its stock rise by 1.2% in the morning trading session on the BSE to Rs.106.05. The bank’s mutual fund holding surged by 3.47% YoY, jumping from 1.23% in Q2 FY24 to 4.7% in Q2 FY25. The stock gained positive 14.4% over one year but dipped 8.2% year-to-date.
The bank’s net interest income rose to 6.3% above the Rs.5,975.2 crores it had clocked during Q1 FY24 and increased further to Rs.6,352.7 crores during Q1 FY25. More importantly, the bank’s net profit was up by 15.5% YoY in Q1 FY25 after it posted Rs.1,501.2 crores against Rs.1,734.3 crores. Bank of India operates under three baskets: treasury operations, wholesale banking, and retail banking. Its treasury operations include investing in government and other securities, money market dealings, and foreign exchange operations.
Indian Bank
Indian Bank’s stock rose 1.7% in morning trading on the BSE with a market capitalization of Rs.69,907.4 crores and closed at Rs.527.7. The company’s holding by mutual funds increased by 4.26% YoY, which rose from 8.01% in Q2 FY24 to 12.27% in Q2 FY25. The stock has delivered 26.3% returns over the past one year. On the other hand, it has also given 23% returns in the current calendar year.
The bank’s net interest income surged 8.3% YoY to increase from Rs.5,703 crores in Q1 FY24 to Rs.6,178 crores in Q1 FY25. Net profit had risen by 40.6%, jumping from Rs.1,709 crores to Rs.2,403 crores in the same period. Founded in 1907, Indian Bank offers treasury, corporate/wholesale banking, retail banking, and other banking operations services.
The PSU stocks have attracted significant interest from mutual funds. They have, in turn, increased their stake, showing confidence in the financial health and future growth prospects of these companies.
