Chasing dividends? Team Prashant Jain goes all in for GAIL, ITC in Jan

The data collated by East India Securities shows the money manager bought 1.43 crore shares of gas distributor GAIL (worth Rs 201 crore in current prices), 1.32 crore shares of ITC (Rs 294 crore) and 1.26 crore shares of infra project financier IDFC (Rs 76 crore) during January.

Beside them, Jain and his team bought 20-70 lakh shares of Zee Entertainment, Oil & Natural Gas Corporation, Coal India, Power Grid Corporation Of India, Redington (India), Bharti Airtel, Max Healthcare, Bharat Petroleum, Mahindra & Mahindra, The Indian Hotels, The Federal Bank and SBI Life Insurance.

The market has been on tenterhooks in the last couple of months due to a number of uncertainties including rising inflation, prospects of monetary tightening and geopolitical tensions in Europe. Many said, volatility was also because of high valuations and it needed a much needed correction. However, Jain is not among them.

“Unlike some people who think the market is very expensive, that is not true,” he said in a public address last month.

“In the market cap to GDP chart, we are somewhere in the middle of the past range. India is a rapidly growing economy. Our nominal GDP growth should be 12-14 percent year-on-year. What looks expensive now, will be fairly/under-valued six months down the line as you roll over to the next year.”

He believes long-term market returns will likely be in line with nominal GDP growth rate of India.

The government recently reported India’s nominal GDP growth rate at 17 per cent year-on-year, largely because of a low base. In the long term, it has been much lower at around low double digits.

HDFC Mutual Fund has also not shied away from booking profits in outperformers, and dumping some of the underperformers, it seems. The fund manager dumped 81 lakh shares of NTPC and 63 lakh shares of NHPC, two of the power generation stocks.

It also sold 20-40 lakh shares of Tata Motors, CG Power and Industrial Solutions, RBL Bank, Hindustan Petroleum, CESC, Crompton Greaves Consumer Electricals, MEP Infrastructure Developers and Power Finance Corporation and NLC India.

The third largest mutual fund company by assets also completely exited Prince Pipes and Fittings, Paras Defence and Space Technologies and CE Info Systems—a couple of them were recently listed stocks, which it had grabbed during anchor allotment.

At the same time, it freshly entered AGS Transact Technologies, Adani Wilmar, TVS Motor Company, Indiamart Intermesh and HG Infra Engineering, data shows.

Some of the above mentioned buying and selling may not have been part of the fund manager’s strategy but just requirements due to changes in the benchmarks followed by passive funds.