Mutual fund managers have been on a shopping spree for banking stocks, raising their allocation to the sector to Rs 90,000 crore in May.
Increasing participation in the banking sector by fund houses is likely because of the attractive valuations in the public sector banks and long-term value in the private sector banks, market participants said.
Data from the Securities and Exchange Board of India (Sebi) shows that equity mutual funds deployed Rs 90,014.48 crore in the banking sector as on May. In March and April this year, deployment into the banking stocks was Rs 82,195.78 crore and 85,330.17 crore, respectively, Sebi data shows.
Gopal Agrawal, CIO at Mirae Asset Global Investments (India), said, “Everyone is aware that the banking sector is proxy to the economy. With economy under progress and worst of problems in public sector banks already priced-in, there is some demand for banking sector stocks. On the other hand, prospects of private sector from the long-term view look very positive.”
