Hindustan Petroleum Corporation Ltd (HPCL), Bharat Petroleum Corporation Ltd (BPCL), Punjab National Bank Ltd, Canara Bank Ltd, Bharat Heavy Electricals Ltd (BHEL), Life Insurance Corporation of India (LIC) and Mazagon Dock Shipbuilders Ltd are among the BSE PSU index constituents where mutual funds were buyers in the September quarter. Data showed foreign portfolio investors also raised stakes in many of these PSUs in the quarter gone by.
In the case of HPCL, mutual funds increased stake in the oil marketing company (OMC) to 16.29 per cent in Q2 from 14.5 per cent in Q2. FPIs also increased their stakes by 89 basis points to 14.11 per cent from 13.22 per cent sequentially. This stock is up 22 per cent since the end of June quarter.
Similarly BPCL saw domestic funds raising their stakes by 134 basis points to 10.9 per cent in Q2 from 9.56 per cent in Q1. FPIs upped stake in the OMC by 35 bps to 15.39 per cent from 15.04 per cent. This stock gained 12 per cent since June-end.
In the case of PNB, FPIs were more bullish than domestic funds. FPI holding in the PSU bank jumped 2.91 per cent to 8.42 per cent from 5.51 per cent in Q1. Desi funds upped stake in PNB by 96 basis points to 2.87 per cent in Q2 from 1.91 per cent in Q1. This scrip is down 15 per cent since the June quarter.
In Canara Bank, MF holding rose 85 bps to 4.34 per cent but FPI holding fell 0.65 bps to 11.24 per cent. This stock is down 13 per cent since Jun-end.
MFs increased stake in BHEL, LIC and Mazagon Dock Shipbuilders by 8-46 basis points. FPI stake in Mazagon fell by 99 basis points, but increased in BHEL by 38 bps.
The bull market cycle in PSU stocks that started off during mid-2023 was preceded by a 15-year Bear market. When a bull market is incubated from such a big base, it is reasonable to assume multiple legs, Biju Samuel of Elara Securities said in a October 12 note.
“The excess returns of public sector enterprises (PSE) stocks have fully mean-reverted currently in what could most likely be the bottom of the Bull Market correction. This could be an attractive inflexion point,” he said.
