Assets of mutual fund and foreign portfolio investors (FPIs) in petroleum and Oil & Gas sectors have appreciated by more than 79 per cent to ₹5.05 lakh crore in the first two quarters of the current fiscal. The value of their assets in these sectors stood at ₹2.82 lakh crore as of March 2020.
According to the latest SEBI data, mutual funds’ assets in stocks belonging to the petroleum sector increased by 60 per cent to ₹89,596 crore as of September 2020 from ₹55,969 crore in March 2020. The share of petroleum stocks in the overall equity AUM of mutual funds has increased to 7.68 per cent, from 6.23 per cent, during March-September period. MF assets in the Oil & Gas sector also increased marginally to ₹19,093 crore from ₹18,777 crore during this period.
The ‘RIL Factor’
Mutual Fund experts say that the spike in exposure in the petroleum sector is not on account of any large-scale fresh investments but primarily on account of Reliance Industries’ (RIL) stock price appreciation over the last few months.
“One of the largest stocks in the ‘Oil & Gas’ and ‘Petroleum’ sectors is Reliance. The increase can be predominantly attributed to the increase in the share prices of RIL, which have nearly doubled in the past 4-5 months,” Juzer Gabajiwala, Director, Ventura Securities, said, adding, “There is not much of a substantial increase in exposure by means of additional investments by the mutual funds.”
Thanks to multi-billion dollar deals, the share price of RIL has gone up by 143 per cent over the last six months. During April-October,