Top 5 Penny Stocks Held By Mutual Funds In India

Regardless of market conditions, mutual funds and FIIs are looking for penny stock investment ideas.

Because of the hazards, mutual funds and foreign institutional investors (FIIs) rarely invest in penny stocks. They do, however, realise that fundamentally sound penny stocks can produce fantastic profits.

After all, a decade ago, Avanti Feeds, Bajaj Finance, Alkyl Amines, Deepak Nitrite, and Astral Polytechnik were all penny stocks.

1. Federal Bank

The first company on our list is a private bank with strong asset quality. Kochi-based Federal Bank is the culprit.

Federal Bank is a mid-market lender with a strong presence in semi-urban areas with a particular concentration on the southern states, particularly Kerala.

Its advanced portfolio is well-diversified across industries, including corporate, retail, small and medium-sized businesses, and agriculture.

Mutual funds own a massive 32.58 percent interest in the bank as of December 2021. Federal Bank’s mutual fund holdings have grown over time. However, in the most recent quarter, it fell somewhat.

Foreign investors (FIIs) have a large exposure to the bank, accounting for 25.23 percent of total equity.

2. DCB Bank

Another private bank in the list with high mutual fund exposure is DCB Bank.

Incorporated in 1995, the bank was formed through the merger of Ismailia Co-operative Bank and Masalawala Cooperative Bank. It had a network of 367 branches and 353 ATMs as of December 2021.

Mutual funds hold 28.58% stake in DCB Bank. This increased from 27.36% in September 2021.

Even FIIs have a good exposure at 9.24%. Although it is down from a high of 22.8% in March 2020. FIIs are reducing exposure to the bank for the past eight quarters.

The stock has been trading in a downward trend for the past couple of months and is currently near its 52-week low.

3. Ashoka Buildcon

Ashoka Buildcon is in the construction and infrastructure facilities business. It also participates in the sale of RMC (ready mix concrete).

The organisation has extensive experience in completing road projects across India, having built over 10,000 lane kilometres to date. This is reflected in its 25-project portfolio.

Mutual funds own roughly 61.1 million shares of Ashoka Buildcon, accounting for 21.75 percent of the company’s total stock. However, it’s worth noting that mutual fund exposure has decreased in the last two years. Mutual funds held 30.76 percent of the stock in March 2020.

4. Gujarat Pipavav Port

Gujarat Pipavav Port, a maritime port services organisation, is next on our list.

Gujarat Pipavav Port is India’s first private sector port, located near Bhavnagar on Gujarat’s south west coast. The port is strategically located on an International Maritime Trade route that connects India with the United States, Europe, Africa, and the Middle East on the one hand, and the Far East on the other.

Mutual funds and FIIs are both heavily invested in this stock. FIIs have a 22.3 percent stake, while mutual funds have a 20 percent stake (96.9 million shares) (107.8 million shares).

For the past four quarters, FII exposure has been increasing, whereas mutual fund holdings have been declining for the past eight quarters.

5. Karur Vyasa Bank

In the states of Southern India, Karur Vyasa Bank has a mid-sized franchise.

As of December 2021, the bank’s portfolio was diversified across segments such as retail (23.2%), agriculture (22.3%), small and medium enterprises (32.3%), and corporates (22.1%).

Gold loans continue to make up a significant percentage of the agriculture portfolio, accounting for 24.6 percent.

It had a network of 781 branches as of December 2021, with roughly 54% of them in semi-urban and rural areas.

As of December 2021, mutual funds own 18.6 percent of Karur Vyasa Bank. This is up 1.68 percent from the third quarter of 2021.