The Hindu Business Line : Franklin India Flexi Cap Fund

DURING June and July 2005, the market witnessed a relentless bull run aided by buoyant FIIs inflows. This called for a lot of discernment from fund houses in re-jigging their portfolios. Business Line takes a look at the churn made in Franklin India Flexi Cap Fund — an open-ended equity scheme managed by Franklin Templeton Mutual Fund.

Franklin Flexi Cap is a diversified equity scheme that invests in stocks across the entire market capitalisation range. The fund has about 84 stocks in its portfolio with 40 per cent concentrated in banks, automobile and IT. Over June and July the fund had altered exposure in almost all portfolio stocks.

A sector-wise analysis revealed that the fund had considerably reduced its exposures in large-cap IT companies and instead chosen to increase holdings in medium and small software companies. This was reflected in a complete exit from Satyam, Tata Consultancy Services and Infosys, and entry into Scandent Solutions Corporation. Entertainment and media were other areas where the fund enhanced its interests.

NDTV and Zee Telefilms saw increase in exposures by more than Rs 50 crore. The fund also showed interest in infrastructure through fresh buying in Jaiprakash Associates and Hindustan Construction. With its exit from Associated Cement, the exposure to cement sector became nil. Similarly, it liquidated the stocks of Cummins India and exited the engines sector.

Unichem Laboratories and Deepak Fertilisers and Petrochemicals constituted 18 per cent and 12 per cent respectively of the fresh exposures taken. Tata Steel and GAIL represented 19 per cent of the value of stocks completely liquidated. The fund, however, balanced its steel portfolio through increased exposures to Jindal Vijayanagar Steel. Indian Rayon and ONGC were conspicuous by reduction in exposures.

Franklin India Flexi Cap Fund had a net asset value of Rs 1,938 crore as of July 31 and is managed by Mr K. N. Sivasubramanian and Mr R Sukumar.

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