An analysis of shareholding patterns of new-age firms such as Zomato, Paytm, Delhivery, Nykaa and PB Fintech, showed mutual funds have increased their holdings in several of these companies slowly but significantly over the last four quarters.
In the case of food delivery platform Zomato, the share of mutual funds has jumped to 10.56% as of September 30, from 5.72% as of December 31, 2022.
Similarly, mutual funds also more than doubled their stake in omnichannel beauty and fashion retailer Nykaa’s parent company FSN E-Commerce Ventures to 10.62% from 4.06% in the same period.
New-age logistics firm Delhivery also saw an increase in mutual fund stake to 14.12% from 11.12%.
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Market experts pointed to the deep correction witnessed by these stocks in 2022 as the reason behind domestic mutual funds boosting exposure to these companies.
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“In 2022, some of these new-age stocks were beaten down from their peaks because of firstly, the risk of trade driven by the global environment, and secondly, the increased supply coming in from selling by existing investors. These were the reasons why some of these stocks went down 40-50% from their peaks, and that created an opportunity for domestic funds to enter these stocks at a reasonable price,” said Gaurav Dua, senior vice president-head, capital market strategy, Sharekhan by BNP Paribas.
“Over the past year or so, a lot of domestic mutual funds, alternate investment funds and PMS (portfolio management services) houses have eventually bought these stocks. Also, their weightage could have gone up because of the sharp jump in stock prices of these companies,” he added.
For example, Zomato’s stock price plunged nearly 70% between November 2021 and July 2022 before it started to recover. On Tuesday, it touched a new 52-week high of Rs 126.35 on the National Stock Exchange (NSE).
Shares of Nykaa have been trading more than 60% lower from their November 2021 peak. Similarly, Paytm stocks have also been trading over 40% down from their peak shortly after listing.
Dua said in the case of certain stocks, the reasons for mutual funds increasing their exposure “may be related to financial performance”. “But it’s not as if all new-age companies have improved. For example, Zomato is at a new high because there is an improvement in its performance,” he said.
On November 3, Zomato reported its second consecutive quarterly net profit of Rs 36 crore in the September quarter. This followed its maiden net profit of Rs 2 crore in the June quarter. Fund houses such as ICICI Prudential, Nippon, Axis Mutual Fund, Mirae Asset and Motilal Oswal Mutual Fund hold stakes in Zomato.
Delhivery, in which mutual funds held 14.12% stake as of September 30, has exposure from fund houses such as SBI Mutual Fund and Mirae Asset fund.
In Honasa Consumer’s anchor allocation, seven domestic mutual funds – ICICI Prudential, Aditya Birla, Nippon India, Axis Mutual Fund, Whiteoak, Invesco India and Canara Robeco Mutual Fund – invested through 19 schemes. Shares of Honasa Consumer closed 4.4% lower at Rs 322.25 apiece on Wednesday, below their issue price of Rs 324.