Midcap Stocks Updates: 1st Quarter

 Despite recent market downturns and concerns about high valuations in midcap and smallcap stocks, fund managers remain optimistic and have continued to invest in quality midcap stocks. The Securities and Exchange Board of India (SEBI) has raised concerns about these valuations and required mutual funds to conduct liquidity stress tests on their portfolios. However, volatility has not deterred fund managers from targeting promising midcap opportunities.

In February 2024, several midcap stocks saw increased interest from actively managed mutual funds. Notable additions include:

  • Hindustan Petroleum Corporation: Added by 22 equity schemes, with a total of 122 schemes now holding the stock. Notable funds that bought into it include Parag Parikh Dynamic Asset Allocation, Kotak ELSS Tax Saver, and Tata Mid Cap Growth.

  • Oil India: Also added by 22 schemes, bringing its total to 82. Funds such as SBI Magnum Comma, Kotak Emerging Equity, and Union Midcap have recently increased their holdings.

  • Cummins India: Newly included in 16 schemes, raising its total to 131. Funds like Nippon India Quant, Canara Rob Mid Cap, and HSBC Large & Mid Cap have invested in it.

  • Indus Towers: Added by 16 schemes, now held by 59. Investments were made by ITI Small Cap, Taurus Mid Cap, and Mirae Asset Midcap.

  • GMR Airports Infrastructure: Added by 13 schemes, with 25 schemes holding it overall. Funds including Quant Mid Cap, Quant Quantamental, and Kotak Quant have shown interest.

  • PB Fintech: Newly bought by 13 schemes, now held by 89. Investments were made by Bandhan Focused Equity, ITI Banking & Financial Services, and Axis Flexi Cap.

  • JSW Energy: Added by 11 schemes, with 32 schemes holding it. Funds such as JM Midcap, Union Balanced Advantage, and Bandhan Flexi Cap have increased their positions.

  • Max Financial Services: Added by 11 schemes, with a total of 121 schemes now holding it. Notable funds include JM Midcap, Union ELSS, and ICICI Pru India Opp.

  • Zydus Lifesciences: Included in 11 schemes, now held by 85. Investments were made by Union Largecap, WOC Mid Cap, and DSP Multicap.

  • Container Corporation of India: Added by 9 schemes, with 110 schemes holding the stock. Funds such as Mahindra Manulife Mid Cap, Quant Mid Cap, and Tata Mid Cap Growth have increased their holdings.

  • Devyani International: Newly included in 9 schemes, with a total of 43 holding it. Notable funds are Bandhan Midcap, Sundaram Mid Cap, and Nippon India Multi Cap.

  • Kalyan Jewellers India: Added by 9 schemes, now held by 32. Funds like Motilal Oswal Midcap, Sundaram Multi Cap, and Franklin India Prima have invested in it.

These investments suggest that fund managers are continuing to see value in midcap stocks despite broader market uncertainties.

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