Infosys: MFs had poured 40% of money in tech sector in Infosys: Kaustubh Belapurkar, Morningstar India

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Talking to ET Now, Kaustubh Belapurkar, Morningstar India, says since March, large-caps have actually marginally done better than the mid and small caps.

Edited excerpts:

The Infosys the stock is down 15% in August. Your research is indicating that in July mutual funds bought aggressively into Infosys. What was the quantum of buying?

The quantum was not very large if you look at the overall holding of Infy but looking at the trend not just in July but through the year, managers have been adding positions while they have been going underweight on technology as a sector. The have been cutting positions in other stocks but Infy has been the favourite stock.

HDFC has bought into it at aggressive level.

HDFC bought into aggressively in the last month but otherwise most managers have added positions over the last one year in Infy. If you look at it, over Rs 50,000 crore investments have been made by funds into the technology sector. 40% of it is in Infy. It is a pretty staggering number in purely one stock in the tech sector.

Do you sense that all of them are going to sell off in the due course of time?

I do not think there is going to be a kneejerk reaction right awa. They can obviously just wait and watch because price action was sudden and swift and there is not really a way that you can get out right away and that is going to hurt the investors. So they will take some time to assess really what is the way going forward before they take an action.

What about the rest of the market because the last time we chatted, we were around the 10000 mark and ever since then, it has gotten a little wobbly. So have the global markets as well. What are the trends that you are picking up. Is this weakness likely to remain and do you think we are going to get back to all-time highs? What is the sense?

In August, we had to see the numbers in terms of domestic investors but July was extremely strong and close to Rs 20000 crore in flows that came into equity and balance funds for the year.

How much equity and how much was balanced?

Equities was about Rs 12000 crore which is a staggering number.

Are small-caps still getting inflows?

To a limited extent because some have actually reduced the quantum that you can invest but a large proportion is in large-caps or flexi cap funds but yes midcap funds do still get some inflows.

Which scheme has still got the maximum inflows?

It is actually broad based. You look at your ICICI, Birla, HDFC, SBI. They are all growing assets.

Name three schemes which have got the maximum inflows?

One that is stood out is SBI Bluechip; Kotak has also grown a fair bit of equity assets over the last year or so and then more broad based ones like ICICI Funds, HDFC Funds have seen inflows.

What else has been the nature in the last one month or so? Ever since the market started correcting we have talked about IT. What else is stood out as a trend sectorally?

Sectorally, the one trend that continues to go through is banks, especially private banks continue to get flows. HDFC, ICICI continue to see and the financial sector exposure now for domestic funds is about 30.5% which to my mind has probably been the highest in the recent history. Pharma, technology continue to see reduction in weightage as we speak.
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