Foreign institutional investors (FIIs) seem to have become extremely cautious, in the recent past, while making investments in the Indian equity market. This could be a fallout of the rise in US bonds.
In 9 out of 11 trading session in February 2018, FIIs have remained net sellers, with net outflows crossing the Rs 9,000-crore mark.
Although the sell-off could be in the short term, it is likely that FIIs would start investing in quality Indian stocks at lower levels.
Figures from the last three calendar years indicate that FIIs pumped in Rs 49,880 crore in 2017, Rs 15,100 crore in 2016 and Rs 13,055 crore in 2015, in the equities market.
To see which stocks were favourite among FIIs, Moneycontrol conducted an analysis with following filters:
1. The FII stake in the stock increased or remained constant on a quarter-on-quarter basis for the past 12 quarters.
2. FIIs held at least 1 percent of the stocks in each quarter in the past 12 months.
Interestingly, there are only eight stocks which passed the above criteria. However, from amongst these, Caplin Point Laboratories is the stock that appears to be FIIs' top bet, as evident from the consistently increasing stake in each of the last 12 quarters, consequently resulting in 200 percent jump in holding from 1.52% to 5.83%.
Price Performance:
5 out of 8 stocks have already doubled the investors’ wealth in the last three years, which includes stocks like Caplin Point Laboratories, Sunil Agro Foods, Hatsun Agro Products, Milkfood and SMIFS Capital Markets. However, Motor & General Finance, Kavveri Telecom, Zodiac Clothing were negative performers.
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