As dollar flow resumes, 12 FPI-favourite stocks make solid short-term gains
Overall, 26 of BSE 500 stocks, with substantial FPI holdings, delivered double-digit returns.
Among them is Adani Green Energy, which is ruling at record high levels after rising 81.57 per cent since the rate cut. The company on Wednesday reported Rs 102 crore profit, its first quarterly profit in 10. FPIs owned 20.36 per cent in the company as of September 30.
Shares of Bliss GVS Pharma, where FPIs hold 24.54 per cent, have climbed 33 per cent since the rate cut. High on news developments, YES Bank is up 32 per cent during these 34 trading days. FPIs own one-third of this bank.
Mannapuran Finance has risen 31 per cent. FPI held 44.68 per cent stake in the stock at the end of September quarter. Max India, Indiabulls Real Estate, Adani Transmission, IGL and Info Edge are other FPI-heavy stocks that have risen 25-30 per cent during this period.
Fortis Healthcare added 23 per cent. FPIs hold 38.77 per cent in this firm. MCX and Reliance Infrastructure have gained over 20 per cent each. FPIs own 26-30 per cent stake in these two.
Since October 29, FPIs have not been net sellers even in a single session. Their buying spree since September has been in contrast to the Rs 17,592 crore outflow seen in August and Rs 12,418 crore in July.
In an email reply to ETMarkets.com, Marteen-Jan Bakkum, Maarten Jan Bakkum, Senior Strategist Emerging Markets at NNIP Investment Partners, said mainly passive money is flowing into India, as global investors are positive about emerging markets (EM) on hopes of a US-China trade deal.
Mumbai brokerage Angel Broking said Dalal Street is incorporating only the impact of direct tax cuts in earnings estimates. “But there would be a second round of impact on growth as the companies would be using the increased profits to stimulate demand through price cuts and by making investment in new capacities,” the brokerage said in a note.
Company-specific developments have also pushed many FPI-heavy stocks higher. In case of Bliss GVS Pharma, a 70 per cent subsidiary recently cleared a USFDA inspection conducted at the company's facility located in Thane.
Manappuram Finance reported a solid 82 per cent rise in consolidated profit at Rs 402.28 crore for September quarter.
Max India has made some rejig, and its shareholders have approved a scheme involving merger of assets of Max India into Max Healthcare and demerger of residual businesses of Max India into Advaita, another unit.
Indiabulls Real Estate has sold its property in London to a promoter group firm for 200 million pounds (about Rs 1,830 crore) as part of plans to focus on India business and to cut debt. IGL’s profit more than doubled in September quarter on tax cut and higher sales. This stock, along with Info Edge, has been added to MSCI’s India index. In the case of YES Bank, the private lender is expecting to rope in strategic investors by December end.
Overall, 26 of BSE 500 stocks, with substantial FPI holdings, delivered double-digit returns since tax cuts.