HDFC MF sells 2% in Persistent for ₹905 cr

The country’s third largest fund house HDFC Asset Management Co. Ltd, on Thursday, has booked profits by selling off over 2% stake in Persistent Systems Ltd for at least ₹905 crore, an exchange filing revealed.

The stake sale has lowered HDFC AMC’s stake to 3.06% in the $5 billion Pune-based IT firm, in which the country’s top fund managers held over 23.5% through 35 different schemes as of June end.

Over the past year, mutual funds have increased their bet on Persistent Systems, increasing their net aggregate holding.

However, since 13 October last year, Persistent Systems’ shares have swelled by 39% from its 52-week low of ₹3,502 to ₹5,775 apiece now, implying that there could be an onset of profit-booking by more public investors in the coming weeks.

Persistent Systems has been a favourite pick among fund managers over the past few years, yielding regular profits from investments.

At present, Kotak Emerging Equity scheme holds 4.36% in Persistent Systems, while Axis Mutual Fund, Motilal Oswal Flexi Cap Fund, Nippon Life India Trustee Ltd, and HSBC Small Cap Fund hold 3.42%, 2.32%, 1.45%, and 1.20% respectively.

Earlier, in December 2021, HDFC MF had booked a similar profit by selling a 2.06% stake in the firm, reducing its overall holding to 5.14%.

The fund house had raised its stake by 2.03% in Persistent Systems in December 2019.

HDFC AMC, which managed at least ₹5.2 trillion in assets as of June end and commands a market share of 11.2%, has reported a 20% year-on-year jump in net profit at ₹436.5 crore for the September quarter.

On 28 September, HDFC MF raised its stake by 2.01% to 8.56% in India’s biggest winemaker Sula Vineyards. Recently, HDFC MF received the Reserve Bank of India’s (RBI’s) approval to raise stake to up to 9.5% in five private lenders—Karur Vysya Bank Ltd, DCB Bank Ltd, Equitas Small Finance Bank Ltd, Federal Bank Ltd, and City Union Bank.

The extant norms restrict a single MF scheme’s shareholding in a listed firm at 10%.

On Thursday, shares of Persistent Systems closed marginally up at ₹5,771.45 apiece on the NSE.