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Kotak schemes' NAVs begin to creep up

Aabhas Pandya

Kotak Mahindra Mutual Fund's K-Tech and K-MNC have seen their net asset values, or NAVs, inch marginally up to Rs 8.50 and Rs 9.70, respectively, after going open-ended on May 2.

While K-Tech had opened for fresh sale and repurchase at Rs 7.84, K-MNC went open-end at Rs 9.35, signifying a discount of 21.6 per cent and 6.5 per cent, respectively, on the offer price of Rs 10.

K-Tech and K-MNC had mobilised Rs 2.58 billion with K-Tech taking the lion's share of Rs 2.18 billion. Based on the current NAVs, the combined corpus has shrunk to Rs 2.24 billion. The two funds hold a substantial portion in cash and money markets as on May 2.

The sectoral funds have borne the brunt of the bear run, which has gripped the Indian markets. Since the two funds closed their IPOs on March 23, the BSE Sensex has dropped a whopping 526 points, or 10.30 per cent, to 4580-levels. The two funds went open-end on Tuesday, when the Sensex had lost another 285 points.

K-Tech has invested in a basket of 36 stocks, with the top ten stocks accounting for 38.51 per cent of the portfolio. Infosys Technologies is the top holding with a weightage of 9.50 per cent.

The other stocks in the top ten are Satyam Computer, HCL Technologies, Zee Telefilms, Software Solutions, HDFC Bank, Hughes Software, DSQ Software, Digital Equipment and MTNL. The fund has as many as 15 stocks with individual weights of less than one per cent.

However, with 37 per cent (around Rs 600 million) of the fund's assets in cash, the fund manager could augment his marginal holdings. The fund has also invested in some unlisted companies like ETC Networks, Mascot Systems and Virtual Dynamics Software.

K-MNC holds around 45 per cent of its assets in cash with investments spread across 27 stocks. HLL is the top holding with a weightage of 8.53 per cent followed by Novartis, Gujarat Gas, ITC, Hughes, Rhone-Poulenc, Hero Honda, Indian Shaving Products, Birla 3M and Hoechst Marion Roussel. With a large portion in cash, K-MNC will be able to invest in quality stocks at attractive valuations.

Source: Value Research

Mutual Funds

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