Samir Arora-backed Helios Flexicap Fund cut its exposure to HDFC Bank by 6 lakh shares in August, reducing the private lender's portfolio weight to 2.59 percent from 3.5 percent, even as it made fresh bets on Coforge and PB Fintech. The fund completely exited five stocks during the month, including Dixon Technologies, BSE and Muthoot Finance, while increasing exposure to One 97 Communications, State Bank of India and Titan Company.
Helios Flexicap reduced its HDFC Bank holding to around 32 lakh shares in August from 38 lakh shares in July. The stock's weight in the portfolio consequently fell to 2.59 percent from 3.53 percent. The reduction is notable given that the fund had increased its HDFC Bank holding in June, when it bought 5.33 lakh shares and raised the stock's portfolio weight from 3.2 percent to 4 percent.
Arora had recently flagged HDFC Bank as a key area of uncertainty. Speaking to CNBC-TV18 recently, he said the stock has become “more confused” following the bank's decision to consider both internal and external candidates for the next CEO. Arora said an external candidate could make the transition more difficult as investors would need to assess a new chief executive and strategy over a longer period.
The reduction also came alongside cuts in Reliance Industries, Bharti Airtel and Welspun Corp. Reliance's portfolio weight fell to around 2.1 percent from 2.9 percent, while Bharti Airtel's declined to 1.4 percent from 2.2 percent.
Coforge was the biggest new position added by Helios in August. The fund bought around 10.4 lakh shares, giving the IT services company a 2.37 percent weight in the portfolio. The addition comes as Arora remains selective on the IT services sector. Speaking to CNBC-TV18, he said Helios would look to add companies capable of delivering meaningful earnings growth, rather than those guiding for flat or low growth. He said IT services stocks are unlikely to see a meaningful re-rating until earnings growth improves.