Foreign institutional investors (FIIs) have reduced their stake in state-owned companies in the March quarter. As per the shareholding data, FIIs have reduced their stake in 17 of the 30 PSUs within the BSE-500 universe.
While most of BSE-500 companies have not yet disclosed their ownership pattern for March quarter, of the available data, Canara Bank shares have seen heavy FII selling. FIIs’ stake in the company has reduced to 8.97% in March quarter from 10.34% in December quarter.
FIIs have reduced their stake in the state-owned power producer NTPC by nearly a percentage point to 9.33%. NTPC has shed more than 12% in the March quarter with analysts expecting power regulator Central Electricity Regulatory Commission’s (CERC) new tarrif rules to hurt the company’s earnings.
FIIs have been off-loading shares of the PSU banks, which have been under pressure owing to concerns over asset quality. UCO Bank (-0.96 ppt), Bank of India (-0.84 ppt), Indian Bank (-0.45 ppt), Central Bank (-0.19 ppt), Corporation Bank (-0.15 ppt) and Bank of Maharashtra (-0.04 ppt) has seen FIIs cut their stake.
Among stocks where FIIs have been bullish, Aurobindo Pharma has seen the sharpest rise in FII holding. The drugmaker has seen FII holding rise by 2.57 ppt to 23.74% in March quarter.
Infosys (1.42 ppt), IDFC (1.22 ppt), Ranbaxy Laboratories (1.05 ppt), Cairn India (1.49 ppt), United Phosphorous (1.84 ppt) and State Bank of India (0.85 ppt) are among other companies where FII holdings have gone up in the March quarter.
In recent days, FIIs have been on a buying spree on expectations of a BJP-led government coming to power at the Centre. FIIs have now been net buyers in each of the last 21 trading sessions, pumping in a total of $4.1 billion. In year to date, FIIs have invested $4.8 billion.
Experts feel a decisive government could revive the economy. “This could herald a sea change for India’s economy, which has struggled with stagflationary-type conditions over the past few years. We think the incoming government will have to de-anchor inflation, raise capital productivity, improve the investment climate and de-lever private balance sheets to engineer a new growth cycle,” Morgan Stanley said in a recent report.