Bharti topples Reliance Industries as fund manager’s favourite

Leading Indian cellular operator Bharti Airtel replaced Reliance Industries as the most preferred stock of Indian fund managers last month, becoming the only company to topple the dominance of the country's most valuable firm since at least December 2006, according to ICRA Online. 

"Bharti, as a consumption play, appears to be far more attractive to funds than a commodity play," Sanjay Sinha, the chief executive of DBS Cholamandalam Asset Management, told Reuters.

As many as 273 funds collectively held 116 million shares of the cellular operator at the end of last month and 15 funds introduced the stock in their portfolios during the month, data from the fund tracker ICRA shows.

By comparison, 270 funds held stakes in Reliance Industries, controlled by Mukesh Ambani, with at least seven dumping the firm - which posted a larger-than-expected drop in June quarter net profit.

Bharti has a market value of about $33 billion, making it India's fourth-most valuable firm. Reliance is worth $66 billion, making it the country's largest firm by market capitalisation. 

Bharti unseated Reliance Industries even though its shares have fallen 3.8 per cent since it announced in May that it had renewed merger talks with South African peer MTN, nearly a year after the companies' prior talks fell through. 

Bharti, more than 30 per cent owned by Southeast Asia's top phone firm Singapore Telecommunications, has consistently added about 2.8 million subscribers a month, making it India's top mobile operator even as rivals such as Vodafone have expanded networks rapidly. 

Firms such as ICICI Prudential Asset Management, IDFC Mutual Fund, ING Investment Management and Principal Pnb Asset Management added Bharti stock to their portfolios, while Canara Robeco and DSP BlackRock dumped Reliance Industries from at least one of their fund's portfolios, according to the Reuters report.