Check out the mid-cap stocks where FIIs lowered stake in Q4
Indian stock indices have come to be dominated by bearish sentiments over the last couple of weeks, shaving off a tenth of its peak value earlier this year after staying put in the consolidation zone in the aftermath of the Russia-Ukraine war that has spiked crude oil prices.
The firefighting move by the Reserve Bank of India to raise interest rates for controlling inflation in the country coupled with monetary tightening move by the US Fed has spooked investors.
Foreign portfolio investors (FPIs), or foreign institutional investors (FIIs), who have become less dominant but still are an important factor determining the trajectory of the indices, had become more cautious about investing in India over the last one year.
In fact, in the October-December 2021 quarter, they were net sellers in Indian equities pulling out over $5.1 billion the process. In the first four months of this year, too, they had shown their bearish sentiments apparent with net sales of securities worth $18 billion, bulk of it on the equities side.
We scanned through the list of companies that have disclosed their shareholding patterns to get names where FIIs have cut their stake. In particular, they sold stake in as many as 92 companies that have a valuation of $1 billion or more last quarter.
Top mid-caps that saw FII selling
FIIs cut stake in around 33 mid-caps, a fourth less than the number of such firms with a market capitalisation between Rs 5,000 crore and Rs 20,000 crore, where they trimmed holding in the October-December 2021 period.
In contrast, FIIs cut stake in around 69 large caps, over twice the number of such firms with a market capitalisation of Rs 20,000 crore or more, where they trimmed holding in the corresponding period. This shows they were less bearish on mid-caps compared to large caps.
Indian Bank, Bank of India, Fortis Healthcare, AIA Engineering, Escorts, Gujarat State Petronet, Ajanta Pharma, Carborundum Universal, Apollo Tyres, IIFL Finance and Glenmark Pharma were among the top stack of mid-caps that saw offshore investors turn sellers.
Bajaj Electricals, Asahi India Glass, Castrol India, Brigade Enterprises, HFCL, Cyient, Graphite India, IDFC, Balrampur Chini Mills, Allcargo Logistics and Firstsource were among the other mid-caps with a market of $1 billion or more where FIIs cut stake.
Indian Bank, IIFL Finance, IDFC were among the mid-caps that have been in the sell basket for the last two consecutive quarters.
If we look at mid-cap stocks where FIIs sold 2% of more stake last quarter we get five names: Escorts, Balrampur Chini Mills, IDFC, Indiabulls Housing Finance and Avanti Feeds.
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