Funds most impacted by fall of InterGlobe Aviation

There seems to be no dearth of bad news for the aviation sector. The latest being the feud between the promoters of India’s largest aviation company, InterGlobe Aviation. This has resulted in a sharp fall in the share price of the company. In the last two days alone, investors have lost almost Rs. 9,200 crore as the share price of the company fell by almost 15 per cent.

A large number of individual investors, as well as institutional holders, were holding the shares of the company. There are more than 90 MF schemes including closed-ended types that were holding the shares of InterGlobe Aviation at the end of May 2019. Out of these, most were either increasing their holdings in the company or maintaining it due to better performance of the company’s shares. Nonetheless, there were few funds such as SBI Focused Equity Fund has reduced its holding in the company substantially in the last one month.

Following are top 10 funds holding shares of InterGlobe Aviation

In the above list, there are a couple of closed-ended funds where the investors can do little.

There are even other reasons for the Investors of Interglobe to worry and that is the rising price of crude oil. Historically, crude oil has a negative correlation with aviation sector companies. If we look at the Brent Crude oil prices it has increased by 26.5 per cent year-to-date. This will adversely impact stock prices. Going ahead, we do not see crude oil prices going down as tension builds up in the Middle East and OPEC continues with supply cuts.

Going ahead, we do not see share prices of the company bounce back and hence investors should not try bottom fishing with this stock.