Mutual Funds Dump 20 Lakh BSE Shares Worth ₹400 Crore Amid Jane Street Probe in July

In July, mutual funds collectively offloaded 20 lakh shares of BSE Limited, amounting to ₹400 crore, as per the Nuvama Institutional Equities report. This major sell-off followed the expansion of SEBI’s probe into Jane Street’s alleged manipulation of Indian indices, affecting market sentiment and investor confidence in exchange-related stocks.

Massive Outflows Triggered by Regulatory Concerns

A significant drop in institutional holding was observed in the BSE stock as mutual funds sold around 20 lakh shares valued at ₹400 crore. This came after SEBI widened its investigation into Jane Street, a US-based trading firm accused of manipulating indices, including BSE’s. The development raised concerns over potential regulatory clampdowns and declining exchange volumes. 

Key Mutual Fund Movements

As per the reports, Invesco Mutual Fund led the selloff by offloading 54.68 lakh BSE shares in July, followed by HSBC Mutual Fund, which sold 10.47 lakh shares. Edelweiss Mutual Fund exited 3.30 lakh shares, while Axis Mutual Fund reduced its exposure. Conversely, HDFC Mutual Fund added BSE as a key portfolio entry, supporting some level of institutional interest.

Read More: Indian Mutual Funds Overseas Assets Drop 5.6% to $8.3 Billion in FY25: RBI!

Investigation Surrounding Jane Street

SEBI’s probe revealed that Jane Street was allegedly involved in artificially inflating prices of Nifty Bank components on expiry days. These manipulations aimed to benefit derivative positions held by the firm, indirectly impacting other market participants. The case broadened to cover BSE indices due to the recent spike in options trading volumes on its platform.

BSE’s Position in Small-Cap Portfolios

As per the report, despite widespread liquidation, BSE remained a top holding in portfolios of Kotak Mutual Fund and Nippon India Mutual Fund under their small-cap strategies. These funds may have adopted a longer-term view despite near-term challenges linked to regulatory uncertainties and market volatility.

Conclusion

The mutual fund selloff of BSE shares in July, worth ₹400 crore, underscores shifting confidence amid heightened scrutiny. With SEBI’s probe continuing into index-related irregularities linked to Jane Street, exchange stocks are facing pressure, especially from institutional investors wary of volume and compliance risks.

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