HDFC Mutual Fund’s Mid-Cap Opportunities Fund has sold off its holdings in Paytm parent One97 Communication, according to the monthly portfolio data, dated December 31, 2021, released on its website. Another scheme from the fund house, HDFC Balanced Advantage Fund, has trimmed its exposure to Paytm by over 91 per cent, monthly portfolio data as on December 31, 2021, showed.
January 10, 2022, was not a good day for Paytm’s parent company One97 Communications Limited. While its stock had an all-time low of around Rs 1,157, its target price got downgraded by investment banking firm Macquarie.
Two other schemes, HDFC Large And Mid-Cap Fund and HDFC Banking And Financial Services Fund, continue to hold the same amount of Paytm shares as they held in November 2021.
Outlook Money wrote to HDFC MF but did not get any response at the time of filing of this report.
HDFC MF was among several anchor investors, including other mutual funds, that bought Paytm shares during the initial public offer (IPO) in November 2021. Four fund houses had invested Rs. 1,050 Crore in One 97 Communication IPO as an anchor investor through 18 MF schemes.
The Paytm IPO was the biggest since Coal India’s IPO in 2010. However, it did not do as well as expected initially. Paytm, India’s biggest IPO with a size of Rs 18,300 crore, got listed on the bourses at 9 per cent discount to its offer price and the share touched the lower circuit on its market debut day. It closed at a price of Rs 1,560, 27.40 per cent below the offer price on November 19, the day it listed on the stock market. Since then, the stock price is on a downward spiral. The stock was down today by 3.77 per cent and trading at an all-time low of Rs 1,185.05 around 12.51 pm in BSE.
Anchor investors in IPOs currently have a lock-in period of 30 days from the date of allotment of shares. However, the capital markets regulator Securities and Exchange Board of India (Sebi) has amended this ruling. From April 1, 2022, this rule has been amended to reduce the 30-day lock-in to 50 per cent of the holdings in any IPO, but the remaining 50 per cent will be subject to a lock-in period of 90 days.
Here is a snapshot of the four HDFC MF funds in question and their Paytm holdings.
HDFC Mid-Cap Opportunities Fund
This fund, with assets under management (AUM) of Rs 31,441.67 crore as on December 31, 2021, held 3,03,756 shares of One97 Communications as on November 30, 2021, accounting for 0.17 per cent of the AUM. However, the portfolio data published on HDFC MF’s website as on December 31, 2021, does not show Paytm shares as part of its holdings.
HDFC Balanced Advantage Fund
This fund, with an AUM of Rs 41,282.13 crore as on December 31, 2021, held 1,84,224 shares of Paytm in November 2021, accounting for 0.08 per cent of the AUM at that time.
However, the December portfolio showed it held only 15,000 shares of Paytm. In other words, it offloaded 1,69,224 or over 91 per cent of Paytm shares between November 30 and December 31, 2021.
HDFC Large And Mid-Cap Fund and HDFC Banking And Financial Services Fund
Unlike HDFC Mid-Cap Opportunities and HDFC Balanced Advantage, the Paytm holding of these two funds were the same in December 2021.
HDFC Large and Mid-Cap Fund, with an AUM of Rs 3,743.58 crore as of December, continues to hold 128,868 shares of Paytm, the same as November.
HDFC Banking and Financial Services Fund, which has an AUM of Rs 2,171.63 crore as of December, also continued to hold the same number of Paytm shares both in November and December 2021—1,31,066 shares.
Recently, HDFC Mid-Cap Opportunities Fund sold all Paytm shares and HDFC Balanced Advantage reduced exposure to the company by over 91 per cent.