Mumbai, Aug. 22: Hindustan Lever (HLL) was squeezed out, while more of ITC was tucked in as Unit Trust of India (UTI) shuffled its kitty of shares last month. Less of some companies and more of others is a trend that is in tune with the mutual fund majorís recent strategy of getting the best deal on its equity pile.
Recently, it sold Bajaj Hindustan and secured an attractive premium on the ruling market price. The fund has also divested a major portion of its Hindustan Zinc holding, and could have sold a slice of its IPCL equity in the open offer made by Reliance Industries. Cadburyís, Phillips and Ciba Specialities are among the shares it hawked in open offers by foreign owners.
UTI will also auction its holding in Nestle to its Swiss promoter, recent reports suggest. It has clung to ITC though, not selling the shares in the market, in the hope of a negotiated deal with the firmís foreign owners.
While the top five equity holdings in most UTI schemes have not changed much in the past couple of months, the fund has been an aggressive seller of the Lever share. This investment strategy has had a direct impact on the companyís fortunes in the stock market last month. The value and proportion of ITC, on the other hand, has gone up in the equity portfolios of schemes.
In Mastershare 1986, an equity-based scheme, UTI sold a whopping 13.05 lakh shares of Lever to bring down its holding to 26.16 lakh. This has been, by far, the largest offloading by any of the schemes under UTIís belt, analysts said. Until June 30, Mastershare 1986 had 39.22 lakh shares of the FMCG major in its vault.
In Master Plus 1991, for instance, the Trust sold 1.43 lakh Lever shares in July, and in CGUS 1992, around 1.38 lakh. The Lever share has hit the skids ever since it slipped below Rs 200. Early last month, it was quoting around Rs 193 before fears of a bad monsoon hammered it.
However, the share has bounced back in the past few days from a low of Rs 163 last month on most bourses. The recovery has been attributed to better rains and reports that UTI has scaled down its selling in the stock.
ITC remains close to the Trustís heart. The value of its holding has surged on the strength of market expectations of a negotiated deal between the mutual fund major and BAT, the UK-based promoters of the cigarette maker.
US-64 worth dips
The market value of US-64 declined 9.92 per cent in July to Rs 11,405.23 crore from Rs 12,662.15 crore on June 30. The value of assets dropped significantly due to high volatility in the stock market.
Three Reliance companies account for 15 per cent of schemeís asset value, according to data released by UTI here today. Its top five equity holdings were Reliance Industries, ITC, Reliance Petroleum, BPCL and IPCL.