Mutual Fund Assets Surpass ₹65 Lakh Crore: A New Milestone for Indian Investors | Weekly Update September 13th

Hello Readers! 

Did you hear the big news? Mutual fund assets just hit a new high, surpassing ₹65 lakh crore. Pretty cool, right? I bet you’re feeling pretty good about your portfolio right now. Let’s take a closer look at the factors driving this milestone, but first – some market highlights of the past week. 

🧾In this Article 

Weekly Market Wrap-up 

Quick bites 

Stocks in News 

IPO corner 

Cover story: Mutual Fund Assets Surpass ₹65 Lakh Crore: A New Milestone for Indian Investors   

Key events 

📈 Weekly Market Wrap-up 

The Indian stock market experienced a positive week. The NIFTY 50 index gained 0.8%, closing at 25,356.50. The NIFTY 500 also rose, up 0.7% to 23,928.20. The NIFTY Bank index saw a particularly strong performance, increasing by 0.9% to 51,938.05. Additionally, the BSE Sensex also closed higher, gaining 0.8% to 82,890.94. This further reinforces the positive sentiment in the Indian stock market. 

Among the midcap and smallcap indices, the NIFTY Midcap 100 gained 1.0% to 60,034.05. The Nifty Smallcap 50 also rose, up 0.6% to 9,376.85. However, the NIFTY Smallcap 100 declined slightly, dropping 0.1% to 19,505.95. 

Sector Spotlight 

This week, the BSE IT index closed at 43,984.14, up by 2.66% with a gain of 1,138.26 points. The BSE FMCG index rose to 23,691.78, reflecting a 2.57% increase, adding 594.15 points. The BSE Capital Goods index reached 72,654.01, up by 2.12%, gaining 1,510.61 points. The BSE Consumer Durables index saw a notable rise of 4.5%, closing at 66,749.49 after a jump of 2,875.81 points. Meanwhile, the BSE Healthcare index ended at 44,309.16, up 1.94% with an increase of 841.56 points. 

Nifty 100 Top gainers  

• Jindal Steel & Power Ltd. = 1,031.10 (▲8.5%) 

• Bajaj Auto Ltd. = 11,737.15 (▲8.1%) 

• Varun Beverages Ltd. = 646.65 (▲7.4%) 

• Divi’s Laboratories Ltd. = 5,498.65 (▲7.4%) 

• Zomato Ltd. = 272.90 (▲7.4%) 

Nifty 100 Top losers 

• Power Finance Corporation Ltd. = 499.50 (▼10.5%) 

• REC Ltd. = 567.70 (▼10.0%) 

• Tata Motors Ltd. = 992.10 (▼7.2%) 

• ICICI Lombard General Insurance Company Ltd. = 2,109.25 (▼6.5%) 

• Oil & Natural Gas Corporation Ltd. = 291.45 (▼6.4%)  

FII and DII Activity: 

The FII activity over the week was mixed. They were net buyers on the first three days, with the largest inflow of ₹1,735.46 on September 2nd. However, they turned net sellers on September 5th and 6th, with significant outflows. Overall, the FII net activity for the week was positive, totaling ₹2430.53. On the other hand, the DII activity was consistently positive throughout the week, with significant net buying on all days. The largest net buying by DIIs was seen on September 5th, amounting to ₹2970.74. The total net DII activity for the week was a substantial ₹7442.2. 

Global Gossip 

The Dow Jones Industrial Average (DOW) declined by 169.30 points or 0.41%, closing at 41393.78. The Nasdaq Composite (NASDAQ) experienced a similar drop, falling by 29.64 points or 0.17% to 17683.98. The S&P 500 (S&P) also declined by 22.38 points or 0.40%, finishing the week at 5626.02. In Europe, the FTSE 100 (FTSE) decreased by 103.54 points or 1.24% to 8273.09, while the DAX (DAX) fell by 207.52 points or 1.10% to 18699.40. The CAC 40 (CAC) experienced the largest decline, dropping by 165.70 points or 2.17% to 7465.25. 

In Asia, the Nikkei 225 (NIKKIE) rose by 190.29 points or 0.52% to 36581.76, while the Hang Seng Index (HANGSENG) declined by 75.21 points or 0.43% to 17369.09. The Shanghai Composite (SHANGHAI) also fell by 61.72 points or 2.23% to 2704.09. 

Rupee Report 

The Indian rupee experienced a slight depreciation against the US dollar during the week. The rupee closed at 83.9175 on September 14, 2024, down from the previous close of 83.96. This represents a decline of 0.0425 points or 0.05%. 

Gold Surges 

Gold prices increased by 0.78% to $2,578.48. This rise was likely driven by a combination of factors, including geopolitical tensions, inflation concerns, and a weaker US dollar. The daily range for gold prices during the week was between $2,556.84 and $2,585.78. The 52-week range for gold prices was between $1,811.03 and $2,586.00. Over the past week, gold prices have increased by 2.40%. 

Overall, the commodities market was bearish, with both gold and crude oil prices facing downward pressure. 

🍟 Quick Bites 

📈 India’s coal production increased by 6.4% to 384.07 million tonnes during the April-August 2024 period compared to the same period in 2023. 

📉 The inflation rate in the USA decreased to 2.5% in August from 2.9% in July. Core inflation remained unchanged at 3.2%. 

🚖 Uber will relaunch its premium ride service, ‘Uber Black’, in Mumbai next week. The service will offer features like quiet mode, temperature control, and luggage assistance. 

🏠 India’s consumption loans grew by 15.2% to ₹90.30 lakh crore in FY24. Home loans increased by 7.9%, personal loans by 25.6%, and auto loans by 20%. 

📉 India’s inflation rate rose to 3.65% in August from 3.54% in July. Food inflation also increased to 5.66% from 5.42%. 

🏭 Industrial production in India rose by 4.8% year-on-year in July compared to 4.2% in June. Manufacturing increased by 4.6%, mining by 3.7%, and electricity production by 7.9%. 

🌴 India’s palm oil imports declined by 26% to 7.97 lakh metric tonnes in August compared to July. Soy oil imports increased by 16%, and sunflower oil imports fell by 22.5%. Overall edible oil imports decreased by 17%. 

🚗 The central government announced ‘PM E-Drive’, a ₹10,900 crore subsidy scheme for electric vehicles, including buses, 2 and 3-wheelers, hybrid ambulances, and charging stations. 

📉 India’s net mutual fund investment decreased by 43% month-on-month to ₹1.08 lakh crore in August. Equity mutual fund investments rose by 3%, debt mutual fund investments fell by 62%, and sectoral/thematic mutual fund investments fell by 1%. 

🔎 Stocks in news 

🚀 Bharat Electronics received orders worth ₹1,155 crore for various products designed by DRDO. 

🏗️ Adani Ports will develop a new cargo loading space in Kandla port. 

💉 Aurobindo Pharma’s subsidiary received US FDA approval for an anaesthetic drug. 

💰 Sona BLW raised ₹2,400 crore through a Qualified Institutional Placement (QIP). 

📈 Dixon Tech will acquire a 6.5% stake in Aditya Infotech. 

⚖️ HDFC and Axis Bank received penalties from RBI for regulatory violations. 

✈️ HAL received a ₹26,000 crore order to supply 240 engines for Su-30MKI aircraft. 

📱 Airtel launched a digital fixed deposit (FD) facility on its mobile app. 

🚢 Mazagon Dock Shipbuilders got an order from ONGC for subsea pipeline replacement. 

🔧 JSW Infra approved ₹2,359 crore for capacity expansion at its ports. 

✈️ GMR Airports acquired an additional 10% stake in Delhi International Airport Ltd (DIAL). 

💻 Dixon Tech’s subsidiary signed an MoU with HP India to manufacture notebooks, desktops, and all-in-one PCs. 

🌐 Airtel partnered with Sparkle to use submarine cable network between India and Italy. 

⚡ Tata Power’s subsidiary will set up 200 fast-charging stations for commercial vehicles. 

💸 Bajaj Holdings approved an interim dividend of ₹65 per share. 

📊 Shriram Finance raised ₹1,000 crore through a debt issue. 

🌍 GE T&D got international orders worth $170.8 million. 

🏢 NBCC signed an MoU with MTNL to develop a residential project in New Delhi. 

👗 Reliance Retail formed a joint venture with Delta Galil Industries to expand apparel business in India. 

🏔️ SJVN will form a joint venture to build a 900 MW hydro project in Nepal. 

💵 Godrej Properties raised ₹64.60 crore through non-convertible debentures. 

💻 TCS partnered with Mansfield Building Society to improve their digital infrastructure. 

♻️ Sustainability Corner  

🌬️ JSW Energy’s subsidiary got a 600 MW wind-solar power project from Maharashtra State Electricity Distribution Company. 

🌞 Tata Power’s subsidiary started production at its 4.30 GW solar cell manufacturing plant in Tamil Nadu. 

💵 Adani Green successfully repaid its $750 million bond issued in September 2021, fulfilling its debt obligation to investors. 

🌬️ Suzlon secured India’s largest renewable energy order to date, winning a contract from NTPC Green Energy to develop 1,166 MW of wind energy capacity. 

🚀 IPO corner 

Upcoming SME IPOs: 

• Western Carriers (India) Limited (Sep 13, 2024 – Sep 23, 2024) 

• Envirotech Systems Limited (Sep 13, 2024 – Sep 23, 2024) 

• Deccan Transcon Leasing Limited (Sep 13, 2024 – Sep 23, 2024) 

• Popular Foundations Limited (Sep 13, 2024 – Sep 23, 2024) 

• Paramount Speciality Forgings Limited (Sep 17, 2024 – Sep 24, 2024) 

• Northern Arc Capital Limited (Sep 16, 2024 – Sep 24, 2024) 

• Pelatro Limited (Sep 16, 2024 – Sep 24, 2024) 

• Archit Nuwood Industries Limited (Sep 16, 2024 – Sep 24, 2024) 

• Arkade Developers Limited (Sep 16, 2024 – Sep 24, 2024) 

• Osel Devices Limited (Sep 16, 2024 – Sep 24, 2024) 

• BikeWo GreenTech Limited (Sep 18, 2024 – Sep 25, 2024) 

• SD Retail Limited (Sep 20, 2024 – Sep 27, 2024) 

News: 

• Bajaj Housing Finance’s IPO became India’s most subscribed ever, with total bids reaching ₹3.24 lakh crore, exceeding 1% of India’s nominal GDP of ₹295.36 lakh crore for 2023-24. 

• The initial public offering (IPO) of PN Gadgil Jewellers, which opened for subscription on Tuesday, was subscribed 12.3 times by the final day of bidding. 

• Some investors missed out on the Bajaj Housing Finance IPO due to missed UPI mandates, with complaints reported on social media and microblogging site X (formerly Twitter) about not receiving mandates despite applying. 

• Laxmi Dental has filed draft papers to raise ₹150 crore via an IPO, which includes a fresh issue of shares worth ₹150 crore and an offer for sale of up to 1.28 crore shares. 

Mutual Fund Assets Surpass ₹65 Lakh Crore: A New Milestone for Indian Investors 

The Indian mutual fund industry has reached a significant milestone! For the first time ever, the total assets under management (AUM) of mutual funds have exceeded ₹65 Lakh crore. This surge in popularity reflects growing investor confidence and a shift towards diversified investment strategies. 

Equity Funds Take the Lead 

A key driver of this growth has been the strong performance of equity funds. In August alone, these funds witnessed inflows of ₹38,239 crore, accounting for 78% of the total inflows into mutual funds during the month. This indicates a positive outlook for the Indian stock market and a growing preference for equity-based investments. 

The Rise of Debt Funds 

While equity funds have been the star performers, debt funds have also made significant contributions to the overall growth of the mutual fund industry. Debt funds, which invest primarily in bonds and fixed-income securities, have seen steady inflows, driven by factors such as interest rate fluctuations and the search for stable returns. 

Key Trends in Mutual Fund Investments: 

• Shift towards index funds: Investors are increasingly opting for index funds, which track the performance of a specific market index like the Nifty 50 or Sensex. 

• These funds offer low-cost, passive investing options. 

• Growth of thematic funds: Thematic funds, which focus on specific sectors or industries, have gained popularity as investors seek to capitalize on emerging trends and opportunities. 

• Increased interest in international funds: As the Indian economy becomes more globalized, investors are exploring international funds to diversify their portfolios and gain exposure to global markets. 

Key Takeaways: 

• The mutual fund industry in India has reached a new peak. 

• Equity funds have been a major contributor to this growth. 

• Debt funds have also seen steady inflows. 

• Investors are increasingly opting for index funds and thematic funds. 

• International funds are gaining popularity. 

Conclusion 

The surge in mutual fund assets is a testament to the growing financial literacy and awareness among Indian investors. As the industry continues to evolve, it’s essential to stay informed about the latest trends and make informed investment decisions. If you’re considering investing in mutual funds, consult with a financial advisor to understand your risk tolerance and investment goals. 

 Upcoming key financial events for the week: 

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