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Contra play: Even in times of their exit, FIIs raised stakes in these 75 stocks

FIIs offloaded shares worth Rs 20,443 crore during the April-June period.

Updated: Jul 20, 2018, 03.37 PM IST
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FIIs offloaded shares worth Rs 20,443 crore during the April-June period.
Foreign institutional investors (FII) turned net sellers during the quarter ended June 30, 2018. However, they were found picking select stocks from across sectors, such as staffing, auto ancillary, construction, chemicals, information technology, pharma, housing finance and stock broking, among others.

FIIs offloaded shares worth Rs 20,443 crore during the April-June period against Rs 13,722 crore inflow in the same period last year. Soaring crude oil prices, a depreciating rupee and higher bond yields in the US were among the primary reasons that led to the outflows.

Among the largecaps, FIIs increased holdings in Axis Bank, HDFC Bank, UPL, Kotak Mahindra Bank, Eicher Motors, Lupin, Power Grid and Bajaj Finance. They increased their holding in HDFC Bank to 40.86 per cent at the end of June quarter from 40.43 per cent as of March 31, 2018.

Barring UPL and Power Grid, shares of these companies rallied between 2 per cent and 27 per cent during the quarter.

Table 1 Nifty companies

Shareholding data available with Ace Equity till July 18 shows overseas portfolio investors hiked stakes in around 75 companies by more than 1 percentage points.

Tiles manufacturer Nitco drew strong interest from FIIs, who raised stake in the firm to 24.25 per cent at the end of June quarter from 1.18 per cent at the end of March.

Among others, Indiabulls Integrated Services, SE Power, Mercator, Gokaldas Exports, MEP Infrastructure and BSEL Infrastructure Realty saw FII holdings go up by more than 10 percentage points during the quarter gone by.

In the real estate space, Sobha, Godrej Properties and Oberoi Realty attracted FII interest. FII holding in the Bangalore-based Sobha rose to 30.27 per cent from 28.53 per cent in the previous quarter, while in Godrej Properties and Oberoi Realty, FIIs raised holdings by over 4 percentage points.

Sales bookings at Sobha jumped 22 per cent to Rs 762.40 crore during June quarter on bigger volumes as well as higher price realisations.

FIIs showed a lot of interest in midcap IT firms, including L&T Infotech (from 6.92 per cent to 7.98 per cent), Sonata Software (from 14.67 per cent to 15.94 per cent), Cyient (from 40.42 per cent to 43.08 per cent), Mphasis (from 22.79 per cent to 29.17 per cent) and Aptech (from 5.19 per cent to 7.12 per cent) during the quarter.

table 2 (3)

From the pharma space, Neuland Labs, Suven Life, Ipca Labs and Marksans Pharma saw strong FII interest.

A depreciating rupee will provide a fair amount of tailwind to IT and pharma companies in terms of margin expansion, but one can’t be sure whether it can improve the prospects of IT and pharma on a headline basis, Dilip Bhat, Joint MD, Prabhudas Lilladher, told ETNow in a chat.

“Selectively, some of the stocks would look good, but as a sector, it would be more defensive and may not help make big money on a proactive basis,” he said.

In the textiles space, Lakshmi Machine Works, Ambika Cotton Mills and Gokaldas Exports saw increased interest from FIIs, who also hiked stakes in Dish TV from the broadcasting space.

Staffing players found favour with foreign investors, who took their stake in Teamlease to 40.30 per cent in Q1FY19 from 32.46 in Q4FY18. Likewise, Quess Corp saw FII holding rise to 13.70 per cent from 4.70 per cent.

“Staffing companies will be a natural play on formalisation of businesses, because you are taking a labour force, which is primarily informal. They will now start coming into the formal world,” independent market expert Saurabh Mukherjea told ETNow.

Staffing companies are a kind of go between. They are the brokers of people. Staffing as a space and formalisation as a theme would be two mega themes that will work wonderfully well in the years ahead, he said.

Also Read

As FIIs return to hunt growth in midcaps, big bets are on these 22 stocks

FII flows not sustainable unless corporate numbers improve: Hemang Jani

Sensex, Nifty scale fresh record highs amid sustained FII buying

FIIs cut bearish positions on index futures, hint at more upside for Nifty

FIIs have started digging into midcaps as well: Sunil Subramaniam, Sundaram Mutual

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