MFS pump `11,000 crore in equities last fortnight; FPIS bearish stance continues Finances are sound; no issues with salary payments: ONGC

NEW DELHI: Mutual fund houses have made investments of over Rs 11,000 crore in domestic equities in the first two weeks of this month despite volatility in the stock markets, even as foreign investors pulled out a massive Rs 19,000 crore.

This comes following a net infusion of Rs 11,600 crore in equities by the fund managers and a net withdrawal of Rs 10,825 crore from stocks by FPIS in September, latest data available with the markets regulator Securities and Exchange Board of India (Sebi) and depositories showed.

The sell-off by foreign portfolio investors (FPIS) in the Indian equity markets has provided an opportunity to mutual fund managers, experts believe.

According to the data, fund managers lapped up shares to the tune of Rs 11,091 crore during October 1-15.

On the other hand, FPIS pulled out Rs 19,084 crore from equities during the period under review.

Investment in domestic equities by fund managers could be largely attributed to retail investors who continued to invest through systematic investment plan (SIP), industry insiders said.

The 30-share Sensex declined 3.75 per cent in the first fortnight owing to sharp fall in the rupee and boiling crude oil prices, turning FPIS into net sellers. Himanshu Srivastava, senior analyst manager research at Morningstar, said while FPIS sold shares, domestic mutual funds continued to pump assets into the equity markets and the staggering difference in their approach could be attributed to the fact that both view the markets from different lens.

"For FPIS, India is just another investment in their portfolio. They continuously evaluate India against other comparable markets and see what investment proposition it has to offer. They will not hesitate in trimming their exposure to India if it does not fare well on the risk-reward profile.

"Hence, due to deteriorating macro factors and increasing tension over global trade war, FPIS have been trimming exposure to India over the last few months," he added.

As for domestic equity mutual funds, Srivastava said their only hunting ground is the domestic stock markets. In fact, the recent market correction has provided a good buying opportunity for investors, and pleasingly, mutual funds are trying to capitalise on the same, which is an ideal approach. NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) Thursday said its finances are as sound as ever and is generating enough revenues to meet all its capital and operating expenditures as well as any additional merit-based requirement.

Debunking reports of the company had to avail overdraft facility to pay salaries to its employees, ONGC Director (Finance) Subhash Kumar said ONGC continues to be on a "sound financial position" and is meeting all of its Rs 32,077 crore budgeted expenditure for 2018-19 fiscal year.

"These claims in some quarters of the company being unable to pay salary to its employees are completely untrue and based on a misinformation campaign," he said. "Even in low oil prices, we were able to discharge all our obligations. And now prices (that ONGC gets for oil and gas it produces) are certainly much better and so there is no question of any default on any count."

The company, which has an annual revenue of about Rs 85,000 crore, has enough resources to meet its capital expenditure and operating expenses, he said. "Salary is only a small expense."

Congress spokesperson Manish Tewari had earlier this week stated that ONGC Employees Mazdoor Sabha has written to Prime Minister Narendra Modi alleging that the public-sector oil giant has been turned from a cash-rich company to totally debt-ridden that has to resort to avail overdraft facility in order to discharge the salary obligation of employees.

"We are apolitical organisation. We don't want to be caught in any politics but the fact is that I have enough resources to meet my budgeted expenditure that includes salaries to employees," he said. "The company is as strong as it was in past. We are capable of meeting the budgeted Rs 32,077 crore expenditure and any additional merit-based outlay."

Kumar said the compa- ny's debt-equity ratio is 0.13:1 which is significantly lower than global peers in oil and gas exploration and production business.

ONGC had borrowed Rs 24,881 crore on a short-term loan to fund buying the government's 51.11 per cent stake in HPCL. It has already paid off close of half of that from revenues it generates.

ONGC had in January this year bought government's stake in Hindustan Petroleum Corp Ltd (HPCL) for Rs 36,915 crore. Of this, Rs 24,881 crore was by way of loan and remaining from internal accruals.