Mumbai, 13 September India’s largest equity fund exited software firms Tata Consultancy Services and Wipro in August as part of a strategy to cut exposure to the sector, data from fund tracker ICRA Online Ltd showed.
The HDFC Equity Fund had allocated more than a fifth of its assets to tech stocks at the end of December, but has cut exposure consistently since then.
The fund held 5.57% of its Rs46.56 billion assets in two tech stocks -- Infosys Technologies and CMC -- at August-end.
Many Indian funds have been reducing stakes in tech firms on concern a strong rupee, that has risen more than 9% against the dollar in 2007, and the turmoil in the US subprime mortgage sector would hurt profits of the export dependent companies.
The BSE IT Index has fallen nearly 16% this year against about 12% rise of the benchmark BSE index.
In a Reuters poll of 11 Indian fund houses between 20-23 August, nearly 64% of the respondents were planning to maintain or cut exposure to the battered sector in the next three months.
The fund, up 18% in 2007, also exited Shoppers Stop, Sun Pharma Advanced Research, and DLF, and cut down on building and metal stocks in August.
It increased exposure to basic engineering to almost a fourth at August-end, ICRA data showed, adding wind turbine maker Suzlon Energy.
In line with other diversified equity funds, HDFC has raised exposure to the sector in 2007 to 24.15 % at August-end from 16.27 % in December. Three of its top-five holdings are basic engineering stocks.
It added realty firm Puravankara Projects and raised exposure to July entrant and top cigarette maker ITC in August.