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Last Updated : Jul 17, 2019 09:56 AM IST | Source: Moneycontrol.com

FIIs raise stake in over 80 cos in Q1; should you buy them?

FII net investment in India was more than Rs 10,000 crore in June quarter. They invested net Rs 2,272.74 crore in equities and Rs 8,111.80 crore in the debt segment

 
 
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Foreign investors raised stakes in 84 BSE companies in the June quarter, according to the shareholding data released till July 15.

They include HDFC, HUL, SBI, ONGC, Coal India, NTPC, Bajaj Finserv, IOC, Power Grid, SBI Life Insurance, NMDC, Muthoot Finance, Corporation Bank and Aarti Industries, among others.

So, should you also invest in them?

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Foreign investors (FIIs) increasing their stake in a company, however, does not make the respective stock worth buying, experts say.

“It may be prudent to look at what FIIs are buying but that should not be the basis for investors to buy at the first instance. FIIs may have compulsions to balance their portfolios in order to buy or sell certain stocks. Blindly following them will make no sense,” Umesh Mehta, Head of Research, SAMCO Securities told Moneycontrol.

Mehta said smart money moving into the likes of HDFC Bank, HUL can be justified as they are attractive and offer growth. But a retail investor does not need to emulate all of their choices.

Foreign investors could have increased their stake in "ONGC, Coal India because of lower commodity prices. They should be avoided for investment at this point,” he added.

Experts suggest retail investors do due diligence before investing their hard-earned money. FIIs and retail investors differ in their risk capacity, time frame and capital, hence they need different approach and strategy, Romesh Tiwari, Head of Research, CapitalAim said.

“However, if the change (of stake) is substantial, like in SBI life insurance and Godrej Properties, the investor should consider it a positive change in favour of that stock,” he said, adding that minor changes in FII stake should be overlooked.

Tiwari further opined that SBI, SBI life insurance, Godrej Properties, HDFC, and NTPC can perform better in the medium term.

Table: Top 20 of the 84 stocks that saw increased stake of FIIs in June quarter. 

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In the same quarter, FIIs reduced stake in more than 100 companies. They include prominent names like HDFC Bank, Bank of Baroda, Ambuja Cements, Biocon, OFSS and Cadila Healthcare, among others.

FII net investment in India was more than Rs 10,000 crore in June quarter. They invested net Rs 2,272.74 crore in equities and Rs 8,111.80 crore in the debt segment, taking the total net investment to Rs 10,384.54 crore, according to the depositories' data.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Jul 17, 2019 09:55 am
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