HDFC Bank shares: These 5 MF houses bought Rs 11,400 crore worth stocks in January selloff

HDFC Bank shares price: ICICI Prudential Mutual Fund’s holding in the private bank jumped to Rs 19,990.25 crore in January from Rs 19,074.69 crore in December, data compiled by PRIME Database suggested.

HDFC Bank shares: Five top mutual fund houses lapped up Rs 11,400 crore worth HDFC Bank shares in January, the month the private lender stock plunged 14.44 per cent following a disappointing December quarter results. Following a nearly 10 per cent surge in December, the HDFC Bank stock took a beating in January, as analysts felt the private lender’s deposit growth needed to outpace loan growth significantly in order to reduce wholesale borrowings in funding mix but they doubted the trend to change easily, as system liquidity was tight and deposit mobilisation tough.

In total, 27 MF houses were net buyers of HDFC Bank shares in January, as per data compiled by PRIME Database. The most-valued banking stock on Dalal Street fell another 3 per cent in February so far.

ICICI Prudential Mutual Fund’s holding in the private bank jumped to Rs 19,990.25 crore in January from Rs 19,074.69 crore in December, data compiled by PRIME Database suggested. While the rise in holding value for ICICI Pru MF stood at Rs 915.56 crore, it was a net buyer of Rs 3,933.91 crore worth HDFC Bank shares, as per PRIME Database.

HDFC Mutual Fund upped its stake in HDFC Bank to 16,19,51,696 shares from 14,29,39,836 shares but its holding value in the bank fell Rs 745.75 crore to Rs 23,686.25 crore from Rs 24,431.99 crore. This mutual fund house was net buying of HDFC Bank shares to the tune of Rs 2,981.62 crore for the month.

Similarly, Kotak Mahindra Mutual Fund was a net buyer of the HDFC Bank stock at Rs 2,625.32 crore, as its holding value rose Rs 1,057.28 crore to Rs 10,694.85 crore from Rs 9,637.57 crore. PPFAS Mutual Fund and Nippon India Mutual Fund also upped stakes in HDFC Bank.

PPFAS MF bought Rs 954.99 crore HDFC Bank share sin January while Nippon India MF added Rs 893.09 crore worth bank stock. Together the five mutual funds bought Rs 11,388.92 crore worth HDFC Bank shares.

SBI Mutual Fund (down Rs 517 crore), Motilal Oswal MF (Rs 336 crore), Axis Mutual Fund (Rs 335 crore) and Franklin Templeton Mutual Fund (Rs 170 crore) were some of the domestic fund houses that were net sellers of HDFC Bank shares in January.

Morgan Stanley in a note said a sharp slowdown in economic growth weighing on loan growth and resulting in higher non-performing loans, high price competitive intensity on loans/deposits and a potential risk of deeper holding company discount if RBI moves to make NOFHC mandatory are a few risks to the downside.

Upside risks to HDFC Bank included better-than-expected loan growth and margin progression, a faster-than-expected improvement in operating leverage and a lower-than-expected asset quality stress.

Shares of HDFC Bank gained nearly 1 percent to Rs 1,424 per share on February 16 after global brokerage firm Morgan Stanley shared an ‘overweight’ rating on the counter, with a target price of Rs 2,110 per share, implying an upside of 50 percent from the last close.

The bullish call came after the management said that it recorded stable and healthy double-digit year-on-year (YoY) growth in its home loan business after merger till December 31, 2023.

Since the announcement of Q3FY24 results, the stock of India’s largest private lender was down 15 percent as investors were disappointed with margin strain, decadal fall in earnings per share (EPS), and sluggish deposits.

However, the management on February 15 said that HDFC Bank recorded 3.6 percent sequential growth as of December 2023 and, after the merger, savings accounts for incremental disbursals have moved to 80 percent from 35 percent.

The bank’s market share has grown by 18-20 percent on incremental disbursals. On a sequential basis, the bank has gained a leading position as it recorded a growth of 3.6 percent which was the highest among its peers in home loans.

“HDFC Bank’s fundamental strategy has been to improve the turnaround time of processing at the front end. The post-merger turnaround time has been reduced to almost a third. This, coupled with the erstwhile HDFC strength of connecting with customers in person, is a potential game-changer in terms of both sales turnover and cross-selling,” the management said.

With Thanks Reference to: https://www.businesstoday.in/markets/company-stock/story/hdfc-bank-shares-these-5-mf-houses-bought-rs-11400-crore-worth-stocks-in-january-selloff-417995-2024-02-19 and https://www.moneycontrol.com/news/business/hdfc-bank-sees-double-digit-growth-morgan-stanley-predicts-up-to-50-upside-12284731.html