The 10 most widely-held stocks : BT Money

The 10 most widely-held stocks

Forget about sifting through thousands of stocks in the market to select potential winners. One measure to judge whether a stock can do well is to see how many mutual funds hold them in their portfolios. The more widely-held the stock, the better its chances of doing well.
Usually, the most popular stocks with mutual funds are companies with huge market capitalisations. Liquidity makes it easier to enter or exit stocks. Besides, fund managers also want to keep a big chunk of their portfolios in stocks that closely follow their benchmark indices. Still, not all the liquid stocks make it to the 10 most popular stocks.

Fund managers usually pick these companies after looking at their future potential, their valuations and whether they can give better returns. Says Bhavesh Shah, VP (Research), Asit C Mehta Investment Interrmediates, a broking firm: “Since Indian mutual funds are doing a good job of giving decent returns, imitating their strategy could prove rewarding.” Not surprisingly, these companies are from the core growth sectors of the Indian economy. In graphics: The most popular Stocks

Reliance Industries

Larsen & Toubro

BHEL

Bharti Airtel

State Bank of India

Reliance Communications

Infosys Technologies

Tata Steel

Oil and Natural Gas Corp

For more with details, visit: The 10 most widely-held stocks

In graphics: Other popular stocks

In graphics: The power players (These companies have sound fundamentals and growth prospects)

Two steps behind
Fund managers have shown interest in other big names, too.
Mutual funds have turned into a formidable force in the stock market over the past five years—their holdings have risen from a negligible amount to Rs 2 lakh crore in equities alone. Not surprising then, the top 20 stocks that mutual funds have invested in account for about 25 per cent of their equity corpus of Rs 48,557 crore. In terms of investment size, Reliance Industries stands tallest with mutual funds holding more than Rs 7,858 crore worth of the stock. This is nearly double that of their second-largest holding, in ICICI Bank, which accounts for about Rs 4,008 crore. This is closely followed by engineering behemoth Larsen & Toubro (Rs 3,687 crore) and banking giant State Bank of India (Rs 3,060 crore).

It’s no surprise then that all but a few of the top 20 companies that mutual funds have invested in are part of the Sensex. That’s because most of these companies have large market capitalisations, diversified investor bases and fairly liquid stocks. The two companies that are not part of the Sensex are Sterlite Industries and Jai Prakash Associates, in which domestic funds hold Rs 1,279 crore and Rs 2,387 crore worth of equity, respectively. Fund managers, too, have shown a preference for the most popular stocks. For instance, ICICI Prudential Infrastructure Fund has the highest investments (per fund) in five of the top 20 companies.

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