SBI Mutual Fund Picks 2.2% Stake In HDFC AMC

SBI Mutual Fund—India's largest mutual fund by assets under management—on Monday bought 47.3 lakh shares or a 2.2% stake of HDFC AMC, the country's second largest mutual fund.

Bulk and block deal data released by the National Stock Exchange showed that the purchase took place at a price of Rs 1,600 per share, a 5% discount to the closing price on Monday. The total consideration paid by SBI MF for the stake amounted to Rs 757.4 crore. Shares of HDFC Asset Management Co. have declined 23.2% so far in 2023.

While it is common for asset management companies to buy shares of their peers, a deal of this size is rare.

Two schemes of SBI MF—SBI Contra Fund and SBI Magnum Equity ESG Fund—added to their holding in HDFC AMC, a person with knowledge of the matter told BQ Prime on the condition of anonymity.

At the end of February, HDFC AMC accounted for 0.78% of the portfolio of SBI Contra Fund and 1.42% of the portfolio of SBI Magnum Equity ESG Fund, according to data compiled by Morningstar Inc. The two schemes first bought shares of HDFC AMC in 2022.

The two mutual funds share more than just the top berth of the mutual fund industry in India. Navneet Munot, who took over as managing director and chief executive officer of HDFC AMC, was the chief investment officer at SBI MF previously.

Of the stake acquired by SBI MF on Monday, around half of the shares were sold by GQG Partners Emerging Markets Equity Fund. Details of the other sellers were not immediately available.

GQG Partners made headlines earlier in the year for acquiring a stake in Adani Group companies.