FIIs raise exposure in IT, finance & pharma firms in Sept quarter

Written by Jash Kriplani | Mumbai | Updated: Oct 29 2014, 07:41am hrs
Foreign institutional investors (FIIs) seem to have bet big on banking, finanacial services and insurance (BFSI) industry in the September quarter. In the quarter, FIIs raised their stakes in as many as 42 BFSI firms in the BSE-500 universe.

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Of 370 BSE 500 firms that have released their latest shareholding pattern, FIIs raised their stakes in as many as 188 firms, and reduced their exposure to as many as 173 companies.

Among the BFSI sector, Repco Home Finance has seen the sharpest rise in the FII stake, show Capitaline data. FIIs have raised their stake by 12.79 percentage points in the September quarter in the company. Among other companies in the sector, Capital First (1.64 ppt), Muthoot Finance (1.56 ppt), Shri City Union (1.25 ppt), JM Financial (1.07 ppt), Yes Bank (1.26 ppt), Bank of Baroda (1.05 ppt), ICICI Bank (1.05 ppt) and City Union Bank (0.8 ppt) have seen a rise in the FII stake.

Following the BFSI sector, FIIs holding have risen the most in the IT space. The FIIs have raised their stake in as many as 22 IT companies. In the IT sector, FII holding rose the sharpest in KPIT Technologies, from 37.67% in the June quarter to 45.81% in September quarter. Mindtree (3.18 ppt), Cyient (1.98 ppt), Firstsource Solutions (1.35 ppt) and Infosys (1.11 ppt) have all seen further rise in FII holdings.

In keeping with their preference for sectors with strong earnings visibility, FIIs have further raised their stake in 15 pharma companies. Dr Reddy's Laboratories and Natco Pharma has seen FII holding rise by 3.12 ppt and 2.1 ppt, respectively, in the September quarter. Among other pharm stocks, FIIs have further accumulated Indoco Remedies (1.77 ppt), Glenmark Pharma (0.72 ppt), Ranbaxy Laboratories (0.66 ppt) and Wockhardt (0.66 ppt).

FIIs have pumped in more than $13 billion YTD in the equities. In the September quarter, the overseas investors bought nearly $4 billion worth of equities.

According to foreign brokerages FIIs remain bullish on India. We met more than 80 investors across the US and Asia. Nearly everyone whom we met was overweight (OW) on India, although many investors had trimmed their OW positions slightly. This supports our analysis that India is the biggest OW market among GEM investors, with an OW position of more than 400 bps, BofA-ML said in a recent report.