Hot favourite! This stock is the No. 1 choice of 32 mutual funds

NEW DELHI: With Rs 1.44 lakh crore of mutual fund money riding on it, India's second-largest private lender ICICI Bank is now clearly the hottest stock on Dalal Street for fund managers. Data shows that the bank stock is the biggest bet of at least 32 mutual fund houses in India, including the top 3 giants - SBI MF, ICICI Prudential AMC and HDFC AMC.

Even at the cumulative level of the entire industry, ICICI Bank is the largest holding at Rs 1,44,132 crore which is equivalent to 6.65% of the equity mutual fund industry’s assets under management (AUM) as of September-end, shows data from Prime Database.

All the top 10 mutual fund houses, barring Axis MF, have ICICI Bank as the largest holding.

India's largest fund house, SBI Mutual Fund which manages assets worth around Rs 6.85 lakh crore, has invested 7.69% of its equity AUM in ICICI Bank. For ICICI Prudential MF, the figure is 7.5%, HDFC MF 6.46%, UTI 6.86%, Nippon India 4.93%, Kotak 6.86% and Aditya Birla 7.7%.

Other mutual funds with ICICI Bank as the single largest bet are DSP, Franklin, Tata, Canara Robeco, L&T, Sundaram, Invesco, IDFC, Motilal Oswal, PGIM India, Baroda Mutual Fund, Bank of India Mutual Fund, Edelweiss, Navi, HSBC, IDBI, IIFL, Indiabulls, JM Financial, LIC MF, Taurus, Union, ITI, Shriram and White Oak.

Sandeep Bakhshi, who took over as ICICI Bank's MD and CEO in Oct 2018, is widely credited to have led the turnaround of the lender, leaving behind all legacy issues by cleaning up the balance sheet, improving asset quality and net interest margins, bringing customer-centric culture and digital transformation initiatives.

In the last four years of his tenure, the stock has rallied over 175%.

At Rs 1.16 lakh crore, rival HDFC Bank is at No.2 among MF favourites. After its merger with parent HDFC is completed, the merged entity might beat ICICI Bank as the No.1 choice of mutual funds. As of September-end, HDFC was the seventh largest bet of MFs with investments totalling Rs 48,379 crore.

Not just mutual funds, ICICI Bank is a hot favourite of many PMS funds as well as Dalal Street brokerages.

“We believe over the last few years, ICICI Bank has successfully turned around its corporate bank (with legacy issues from the era of the previous CEO now having been dealt with), while the retail bank continues to do well,” Rs 13,000 crore PMS fund manager Saurabh Mukherjea had recently told investors in a note.

Trendlyne data shows all 39 analysts covering the stock have a buy rating.

"In largecaps, our top pick is ICICI Bank. The company has reported broad-based loan growth of nearly 17% year-on-year," said Jayesh Bhanushali, IIFL Securities. The brokerage has a target price of Rs 980 on the stock.

While the average target price of all brokers on the lender is at Rs 1,015, the highest one on the consensus buy goes up to Rs 1,225.

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