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What happened in March
In March, HDFC Bank fell 17%, and the shares of this stock crashed nearly 9% on March 19 to hit the day’s low of Rs 770 on NSE amid leadership worries after part-time Chairman and independent director Atanu Chakraborty stepped down, stating that he observed certain practices at the company over the last two years that did not align with his personal values and ethics.
In his resignation letter, Chakraborty said that certain developments and practices within the bank over the past two years did not align with his personal values and ethics. “This is the basis of my aforementioned decision,” he wrote.
The other five stocks from which the small cap fund made a complete exit were Aarti Industries, Aptus Value Housing Finance India, Indian Hume Pipe Company, One Source Speciality Pharma and Vinati Organics.
Among these five stocks, around 41.74 lakh shares of Aarti Industries, 36.49 lakh shares of Aptus Value Housing Finance India, 7.69 lakh shares of Indian Hume Pipe Company, 1 lakh shares of One Source Speciality Pharma and 3.62 lakh shares of Vinati Organics were sold.
Around seven new stocks were added to the portfolio, which include Triveni Turbine, Sai Parenterals, PTC India, Praj Industries, Lloyds Metals and Energy, Kalyani Steels and Blackbuck.
The exposure was reduced in six stocks, which include Adani Power, Aegis Logistics, BASF India, Graphite India, K.P.R Mill and Minda Corporation. Around 44.05 lakh shares of Minda Corporation were sold from the portfolio, and the fund had a total of 27.19 lakh shares in its portfolio in April.
The fund sold 7.16 lakh shares of Aegis Logistics from its portfolio. It sold around 6.15 lakh shares of K.P.R Mill, 5 lakh shares of Adani Power, 25,085 shares of Graphite India, and 12,641 shares of BASF India.
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The small cap fund increased its stake in seven stocks, which include Black Box, Capri Global Capital, Marathon Nextgen Realty, RBL Bank, Reliance Industries and Strides Pharma Science. Around 49.69 lakh shares of RBL Bank, 15.34 lakh shares of Reliance Industries, and 10.50 lakh shares of Capri Global Capital were added to its portfolio.
The exposure in 80 stocks remained unchanged, which include some stocks such as Adani Enterprises, Adani Green Energy, Anand Rathi Wealth, Balrampur Chini Mills, Castrol India, Gland Pharma, HFCL, ICICI Bank, Juniper Hotels, NCC, and Welspun Enterprises.
In April, the fund had 100 stocks in its portfolio, the same as in March. Launched on October 29, 1996, the fund had an AUM of Rs 30,374 crore. The performance of the fund is benchmarked against Nifty Smallcap 250 TRI and is managed by Sandeep Tandon, Ankit Pande, Varun Pattani, Ayusha Kumbhat, Yug Tibrewal, Sameer Kate, and Sanjeev Sharma.
The primary investment objective of the scheme is to seek to generate capital appreciation and provide long-term growth opportunities by investing in a portfolio of small-cap companies.
According to the monthly release by the fund house, this scheme is for investors with a long-term investment horizon and a high risk appetite. The bulk of the portfolio is invested in high-growth companies with attractive valuations and is relatively under-owned.
The fund house also said that its orientation towards maximising the mix of large caps over the last year in the portfolio is a reflection of its defensive view of the market. This has helped increase the liquidity of the portfolio and mitigate the effects of high impact costs.
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As a result, drawdowns have been contained compared to the meltdown in the broader market. During the month, exposure to power (+1.43%), telecom (+1.07%) and metals (+0.67%) was increased, while financial services (-4.23%), chemicals (-0.99%) and auto (-0.94%) were reduced, the release further said.
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