Despite pouring in Rs 40,000 crore during January-March 2019, FIIs have sold net Rs 20,000 crore worth of stocks in last one year
In the last one year, among BSE500 companies, about 85 companies have seen a consistent rise in stake held by foreign investors (FIIs).
Most of the stocks that saw a consistent buying by FIIs have given negative returns in last one year, highlighting that foreign investors have been quick to raise stakes at lower levels.
These 85 companies include Indiabulls Housing Finance, Shriram Transport, JustDial, Zee Entertainment, Bharti Infratel, Manappuram Finance, Havells India, HCL Technologies, PTC India and Tata Global Beverage, among others.
Table: 30 out of 85 companies that have seen a gradual increase in FII holdings in the last four quarters.
Despite pouring in Rs 40,000 crore during January-March period, FIIs have sold net Rs 20,000 crore worth of stocks in last one year.
That is because, in the last one year, FIIs have gradually reduced stake in 107 BSE500 companies, making them net sellers in the last four quarters. They include mid and smallcap names like Mindtree, Crompton Greaves, Oberoi Realty, Hindalco Industries, City Union Bank, Apollo Tyres, among others.
They have also reduced stake in some large-cap companies. Maruti Suzuki's lacklustre performance lately has forced FIIS to trim their stake in the company to 22.30 percent in the March 2019 compared to 23.66 percent in June 2018.
Last month, Maruti Suzuki India reported a 5 percent YoY fall in March quarter profit, dented by weak operating performance and muted sales volume.
Another automaker M&M has also seen a declining interest of FIIs in its stock. The FII holding in the company has fallen to 31.30 percent in March 2019 from 33.98 percent at the end of June 2018, AceEquity data showed.
FIIs have trimmed their stake in FMCG major ITC as well. It is now at 17.04 percent compared to 17.49 percent seen at the end of June 2018.
FIIs resume selling in May
After a couple of months of buying, FIIs have resumed selling in May just ahead of elections verdict scheduled on May 23. However, experts attribute the current round of selling largely to global concerns, adding, if NDA gathers majority then the money that is waiting on the sidelines will also enter equity markets.
“Currently, most of the FII flows into India have been a part of the emerging market (EM) focused funds and not necessarily in India focused ETFs alone,” Nitin Rao, CEO, Reliance Wealth Management told Moneycontrol.
“A stable administration at the Centre could see India focused ETFs also attract flows. Given our views on other macro factors that we discussed, we see FII flows sustaining in Indian equities,” he said.
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