Maruti Suzuki back on MF radar

Maruti Suzuki India, the country’s largest passenger car company, was the most sought stock for mutual fund managers last month.

Equity fund managers pumped Rs 550 crore in the stock, even as it was ruling at all-time high levels. The shares moved in a range between Rs 3,341 and Rs 3,730, a record high on a closing basis.

Interestingly, it was only last year that MF managers were up in arms against the management of Maruti Suzuki over its Gujarat factory proposal. The company had proposed the facility be set up as a wholly-owned subsidiary of parent Suzuki. Most investors were opposed, fearing Maruti Suzuki would end up as a marketing and sales company. The shares had dropped to below Rs 1,600 in March last year.

What followed was a series of meetings and discussion between the management of the car maker and institutional investors. MF executives said they were bullish on Maruti Suzuki after its management had largely addressed the concerns they’d raised. “The company has taken note of our concerns and has done the necessary changes,” said a senior official at a leading fund house.

Adding: “The economic impact on the company, which we were most concerned about, has been taken care of. Maruti as a brand among domestic consumers is matchless. It’s appeal to the mid-income class in the country exceeds expectations. With the macro economic situation improving and around half a dozen new launches and facelifts in existing models, this will propel growth for the company.”

A report by Edelweiss Financial Services say the country’s largest fund house, HDFC MF, was the biggest buyer in the stock, having invested Rs 170 crore in January.

In terms of investment corpus, Maruti Suzuki is the seventh most-owned stock by MFs, with an asset size of Rs 6,465 crore, about 2.09 per cent of the overall equity assets. It's the only company from the automobile space to make it to the top 10 bets of MFs.

Nearly 205 equity schemes have exposure in the passenger car maker. A year before, it didn’t find place in fund managers’ top 10 picks. The fresh amount invested in the auto maker last month was higher than that invested in other blue-chips including Coal India, Axis Bank and HDFC Bank.

Maruti Suzuki India Limited