MFs take to RBL after M&M investment
MUMBAI : Top mutual fund houses were active on the RBL stock counter last month, coinciding with auto major M&M’s ₹417 crore investment for a 3.53% stake in the Mumbai-based lender, which was greeted with surprise by the market. Axis MF made a new entry into RBL stock counter while Aditya Birla Sun Life MF, which held 1.32% of its equity as of June quarter, added more, shows data from brokerage Nuvama. Interestingly, Nippon India MF, which held the highest stake among peers of 3.09%, cut its stake in RBL.
These purchases helped the stock gain 25% in July, up from ₹181.95 a share to ₹227.85 at month end. Against this, Nifty Smallcap 100 index rose 8%. The days on which the stock had hefty deliveries were 27 July worth ₹361 crore, 26 July ( ₹247 crore) and 17 July ( ₹265 crore).
M&M informed exchanges of its investment in RBL on 26 July. M&M added that it would consider a further investment up to 9.9% in RBL subject to regulatory approvals. The M&M and MF activity could have happened on the three aforesaid sessions .
MFs held a combined 11.64% of equity in the bank as of June 2023 quarter. They had cut that from 13.72% in Jan-Mar. The day after M&M annou-nced its investment the stock jumped to a 52-week high of ₹251.40.
It has recovered from a 52-week low of ₹95.75 in August last year after NPAs and slippages moderated. “NPA hiccups are behind; showing strong sign of recoveries: The bank’s reported slippages were down at ₹5.6bn v/s 6.8bn the previous quarter. Management expects slippages to moderate going forward.
The up-gradation & rec-overies stood at ₹2.7bn against ₹3.8bn in 4QFY23. Additionally, write-offs were at ₹3bn v/s ₹3.4bn in the previous quarter. Lower slippages and moderate upgrades and write-offs resulted in
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