The IT stock investments of mutual funds hit an eight-year low in February, according to a report by Motilal Oswal Financial Services.
While the investments on a monthly basis went down by 140 basis points from 8.3 per cent in January to 6.9 per cent in February, the investment on a yearly basis went down by nearly 260 basis points from 9.5 per cent in February 2025, the report said.
The report highlighted that in February, sectors like technology, consumer, telecom, e-commerce and chemicals saw a month-on-month (MoM) moderation in weights. The technology sector was the one to witness the maximum reduction in value as it saw a decline of 16.1 per cent on a monthly basis.
The stocks of Infosys, TCS, HDFC Bank, Tech Mahindra, HCL Tech, Coforge, Persistent Systems, Bharti Airtel, Eternal and Wipro witnessed the maximum MoM decline in value. Infosys saw a decline in value by 16.6 per cent with 11 funds adding the stock and nine selling out of their portfolio.
TCS saw a decline in value by 13.9 per cent. While 11 funds added the stock to their portfolio, nine sold out the same from their portfolio. The same goes for Wipro, which saw a decline in value by 7.2 per cent. HCL Technologies saw a decline in value by 13.3 per cent, and 12 funds added this stock to their portfolio, whereas eight sold out this stock in February.
BSE 200 had a total allocation of 7.5 per cent in the technology sector against 6.9 per cent by mutual funds. Some fund houses like Aditya Birla Sun Life Mutual Fund, Franklin Templeton Mutual Fund, ICICI Prudential Mutual Fund, Motilal Oswal Mutual Fund, PPFAS Mutual Fund, Tata Mutual Fund and UTI Mutual Fund, had more allocation compared to BSE 200.
The report further highlighted that the technology sector remained among the top 10 sectoral allocations of most of the fund houses. In February, PPFAS Mutual Fund added 20.68 lakh shares of TCS. The monthly portfolio showed significantly increasing stakes in HCL Technologies, Infosys and Tata Consultancy Services (TCS). PPFAS added 4.3 million shares of HCL Tech, 4.2 million shares of Infosys and 1.9 million shares of TCS as the sector recorded a 20 per cent monthly crash, its steepest fall in two decades.
Foreign institutional investors sharply reduced their exposure to IT stocks in February, selling shares in two phases. They offloaded around Rs 11,000 crore worth of IT stocks in the first half of the month and another Rs 5,993 crore between February 15 and 28, according to National Securities Depository Limited data.
Also read: Equity mutual funds inflow rises 8pc to ₹25,978 crore in Feb
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