One reason for this could be because DCB Bank reported a 22% decline in its net profit for the quarter ended in December 2021.For the entire nine months ended December 2021 too, the bank showed weaker asset quality, excess liquidity, and slower book growth.The other factor could be the FIIs selling stake as the trend clearly shows.#3 Ashoka BuildconAshoka Buildcon is engaged in the business of construction and infrastructure facilities.

It's also involved in the sale of RMC (ready mix concrete).The company has significant experience in executing road projects across India and has constructed more than 10,000 lane km till date.

This is reflected in its portfolio of 25 projects.Coming to Ashoka Buildcon's shareholding, mutual funds hold around 61.1 m shares of the company or 21.75% stake of the total equity.

But an important point to note here is that mutual fund exposure has come down over the past two years.

In March 2020, mutual funds held 30.76% stake.This despite the road and highway developer having an established track record of executing contracts, a robust order book, and a decent financial profile.But there's a big red flag here: Debt.

It remains a key overhang for the company.

Ashoka Buildcon has a debt to equity ratio of over 10x as of March 2021.Over the years, its debt has increased while the company has improved its profitability.#4 Gujarat Pipavav PortNext on our list is marine port services company Gujarat Pipavav Port.Gujarat Pipavav Port is India's first private sector port located on the south west coast of Gujarat near Bhavnagar.

The port is strategically placed to on International Maritime Trade route which connects India with US, Europe, Africa, Middle East on one side and far east on the other side.This stock has high exposure to mutual funds as well as FIIs.

While mutual funds collectively hold 20% stake (96.9 million shares), FIIs have a 22.3% exposure (107.8 million shares).FII exposure has been increasing for the past four quarters while mutual fund holding has been on a downtrend for the past eight quarters.Gujarat Pipavav has a debt free status as of now and has offered healthy dividend payouts (with dividend yields of over 5%) over the years.While this is compelling, one should note that a substantial dividend payout over and above the profit generated, may deplete its cash position.

As it has debt funded capex plans, a lower dividend could be announced in the future.#5 Karur Vyasa BankWhat are the odds? Another bank stock is part of this list.Karur Vyasa Bank has a mid-sized franchise in the Southern India states.The bank's portfolio is diversified across segments such as retail (23.2%) agriculture (22.3%), small and medium enterprises (32.3%), and corporates (22.1%) as of December 2021.With a share of 24.6%, gold loans continue to account for a large portion of the agriculture portfolio.As of December 2021, it had a network of 781 branches, of which about 54% are located in semi-urban and rural areas.Mutual funds hold 18.6% stake in Karur Vyasa Bank as of December 2021.

This is 1.68% higher from the September 2021 quarter.#6 Lemon Tree HotelsLemon Tree is India's largest mid-priced hotel-chain owner.

It operates 87 hotels in 52 cities.With the help of its long-term strategic investor APG, the largest pension fund in the Netherlands, Lemon Tree has grown organically and inorganically, nearly doubling its capacity, in the past few years.Lemon Tree operates hotels across the country with a total room inventory of 8,309 as of fiscal 2021.Mutual funds seem to have a liking with this hotel stock as they hold 13.3% stake in the company as of December 2021.

Although the shareholding has come down lately, consecutively for the past eight quarters to be precise.Along with MFs, FIIs too have a good exposure of 22.8% or 180.7 m shares as of December 2021.Lemon Tree, along with other hotel stocks stayed resilient and have edged higher despite several concerns looming.This is due to the fact that India's tourism and hospitality industry has opened up amid falling covid cases, leading to a revival in hotel bookings.Preferences for accommodation and dining is likely to steer towards reputed, trusted brands that embed hygiene and safety in their products and services.Lemon Tree, being an established player, with a large room inventory, has bright prospects.#7 ITD CementationITD Cementation, with 13% of its equity owned by mutual funds, is another engineering company which forms part of this list.Incorporated in June 1978, ITD is involved in providing design, engineering, procurement, and construction (EPC) services for infrastructure projects in India.It has done variety of work which includes piling, foundations, ground improvement, geotechnical - specialist engineering, marine structures and ports, transportation projects including highways and bridges, hydroelectric projects, industrial works, and urban infrastructure projects.Mutual funds currently hold 22.4 m shares of the company.

Mutual fund ownership has come down over the past two years while the opposite is seen on the FII front.#8 Sadbhav EngineeringNext on our list we have Sadbhav Engineering, which is engaged in the business of development of infrastructure facilities in areas of canals, irrigations projects, roads, bridges etc.Like most stocks we discussed above, the case is similar for Sadbhav Engineering.

Mutual funds have been paring stake in the company over the past eight quarters.

As of December 2021, they hold 13% stake or 22.3 m shares.Even FIIs are doing the same.

FII exposure to Sadbhav Engineering has come down from 11% in March 2020 to just 4.2% at present.Why have mutual funds and FIIs turned bearish on the stock?Well, the company has nothing great to show on the results front.

It has a track record of reporting losses.At present, the company is trying to survive through asset monetisation, raising of funds via any means possible, and staying afloat so that it can push for a revival.In January 2018, the company's stock was trading over Rs 400.

Skip forward to the present and the stock trades at less than Rs 40.

Talk about wealth erosion!#9 Thomas Cook (India)Next on our list, we have another travel related services company – Thomas Cook.Thomas Cook offers a broad spectrum of services that include foreign exchange, corporate travel, leisure travel, visa - passport services, and e-business.

The company set up its first office in India in 1881.Thomas Cook leads both the wholesale and retail forex segments.

The company's wholesale business benefits from its established relationship with large banks in India.

The retail segment is supported by a wide distribution network and synergies with the travel segment.As of December 2021, mutual funds hold 45.8 m shares (12.1% stake) of Thomas Cook.

Promoters of the company hold a majority stake of 65.6%.#10 Navneet EducationThe last stock on our list is Navneet Education.Navneet Education is a leading manufacturer of Maharashtra and Gujarat state board publication books and also stationery products.As of December 2021, mutual funds have a 11.8% stake in the company while FII holding is seen at 3.7%.Mutual funds have been reducing stake in Navneet Education for the past three quarters.

In March last year, they had 15.3% stake.A reason behind this could be the company's performance in fiscal 2021.

The company's publishing segment took a big hit as schools remained closed.

The stationery segment too took a hit but that was cushioned by exports.If you look at the 1 month, 3 months, 1 year, 3 years or 5 years share price chart of Navneet Education, you'll see that it has delivered negative returns.But given its established market position in educational books, Navneet Education could see an improvement in its performance once schools reopen.

Only time will tell.In which other penny stocks do mutual funds have exposure?Apart from the above, here are other penny stocks in which mutual funds hold a significant stake.Track which penny stocks mutual funds are buying and selling...A smart way to filter stocks is to figure out who else is buying them.

By watching this activity, it's easier to get a sense of a stock's prospects.Fund managers carefully pick stocks based on various factors and zero in on stocks best placed to come through.Mind you, fund managers can also make mistakes so mimicking their portfolio does not provide a clear solution.Sustained research should not be compromised.Don't forget to check out Co-head of Research at Equitymaster, Rahul Shah's video where he zeroes in on the right penny stocks to watch out for in 2022.Happy Investing!Disclaimer: This article is for information purposes only.

It is not a stock recommendation and should not be treated as such.

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