60 Mutual Funds to exceed SEBI Norms, to hold Rs 5,000 crore worth HDFC Bank shares

Around 60 popular mutual funds are all set to breach the market regulator SEBI’s norms of holding in security. According to a report by Moneycontrol, around 60 mutual fund schemes will be holding HDFC Bank shares worth Rs 5,000 crore.

This holding will occur post the merger between HDFC and HDFC Bank which is set to be in its final stages.

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SEBI guidelines state that a mutual fund scheme cannot invest more than 10 per cent in a single security while exempting Exchange-traded and Thematic funds.

Of all the 60 Mutual funds part of this holding the largest share will be of Mirae Asset Large Cap Fund – Reg(G) worth Rs 1,231 crore, while HDFC group’s HDFC Top 100 Fund(G) is the second largest holder worth Rs 720 crore.

Moneycontrol reported, two mutual funds Tata Quant Fund Reg(G) and Invesco India Plan Tax Reg(G) will be overshooting the limit by approximately 5 per cent post merger.

SEBI is unlikely to entertain any special exception to mutual funds if they breach the norm according to a Reuters report. The funds will be given a 30 days rebalance period after the merger and they would have to report their holdings in the scheme.

In today’s trade the shares of HDFC Bank were quoted at Rs 1,603 on the National Stock Exchange. it was a high of 0.12 per cent with a volume of 1.4 million shares in the market.