Active MF schemes: Cash hits Rs 2 lakh crore mark as funds deployed lag inflows

Active mutual fund schemes likely sat on a cash pile of Rs 2,00,000 crore in April, as funds deployed to equities lagged monthly inflows. This includes cash, treasury bills, CDs and commercial papers held by active equity-oriented schemes. 

Mutual funds' net buying for stood at Rs 18,000 crore in April. As per estimates by ICICI Securities, active MF schemes buying was limited to Rs 6,300 crore. The remaining can be attributed to ETFs, arbitrage, index funds. This was against an inflow of Rs 24,600 crore into equity-oriented schemes, as per AMFI. 

"The aforementioned behaviour indicates that there was a cash accumulation of Rs 20,000 crore in April, resulting in the cash position of active MF schemes rising to a record high of Rs 2 lakh crore, ICICI Securities said.

Local and FII investors are buying, but MFs are sitting on record cash, BNP Paribas said.

Data showed SIP inflows in April rose to a record high of Rs 26,600 crore despite market volatility. Any bounce back for Indian equities from a crisis situation, during May, could result in domestic flows continuing its ascent, and any moderation in MF deployment could further shore up cash positions, ICICI Securities said. 

"Domestic institutional investors remained slightly cautious, with cash allocation in MFs rising to a multi-year high of 6.1 per cent of AUM and large flows into arbitrage funds. Overall, flows outlook appears positive to us. SIP flows have shown resilience while lump sum flows could return as market sentiment improves," BNP Paribas said in note.
 

Data showed equity assets under management (AUM) for the month was up 3.8 per cent at Rs 30.5 lakh crore. 

ICICI Securities said out of the aggregate net buying, large caps attracted net buying of Rs 100 crore; mid and small-caps witnessed buying worth Rs 3,600 crore and Rs 2,800 crore, respectively. Micro caps saw selling worth Rs 200 crore, it said in a strategy note. 

Reliance Industries (Rs 6,170 crore), Tata Consultancy Services (R 2,538 crore), Axis Bank (Rs 1,094 crore) and Kotak Mahindra Bank (1012 crore) were some of the largecap stocks seeing buying in April. 

Bharti Airtel Ltd (Rs 4,216 crore), ITC (Rs 2,533 crore), HDFC Bank (Rs 2,160 crore) and Bajaj Finance (Rs 1,517 crore) were some of the largecap names seeing MF selling pressure during the month.  

As per another estimate by Nuvama, a  total of 10 stocks including Infosys Ltd, Reliance Industries Ltd (RIL) and Coforge Ltd attracted a whopping Rs 16,000 crore mutual fund (MF) inflows in the midst of earnings season within 30 days.