FIIs pare stake in Nifty50 firms

Published: November 5, 2019 12:43:22 AM

The share of DII holdings in the Nifty rose to 16.9% in Q2FY20, against 16% in the previous qua

sensex, mutual fundsTwenty six companies in the Nifty50 index saw mutual funds increase their stake in them.

By Shashank Nayar

More than half of Nifty50 companies saw a decline in foreign ownership, as share of foreign portfolio investors (FPIs) in Nifty50 fell to 25.6% in the September quarter from 25.9% in the previous quarter, shows an analysis done by IDBI Capital. Foreign investors cut their holding in Yes Bank and Tata Motors the most.

The top five Nifty stocks where FPIs decreased their holdings in the September quarter include Yes Bank, Tata Motors, ICICI Bank, HDFC and Gail India, while they increased holdings in Zee Entertainment Enterprises, Hero MotoCorp, UPL, IndusInd Bank and NTPC.

In the three months ended September, FPIs sold nearly $3 billion worth of Indian equities — the highest in the past 11 quarters. While July and August witnessed considerable FPI outflows from equities, September saw FPI inflows largely on account of renewed optimism post the corporate tax cut announced by the government.

Alternatively, mutual funds’ (MFs) holdings in the Nifty index rose to 8.9% in Q2FY20, compared to 8.3% in the quarter ended June. Twenty six companies in the Nifty50 index saw mutual funds increase their stake in them. Ultratech Cement witnessed the highest interest, with mutual funds almost doubling their holdings in the firm to 8.05%, compared to the previous quarter. The cement manufacturer’s EBITDA had risen to an all-time high of `1,441 crore in Q1FY20, led by higher realisations and falling fuel costs, according to an Edelweiss report.

In addition to Ultratech Cement, MFs bought IndusInd Bank, Yes Bank, Axis Bank and Bharat Petroleum, while they reduced holdings in Maruti Suzuki, Tata Motors, Hero Motocorp and M&M.
The share of domestic institutional investor (DII) holdings, which include mutual funds, banks and insurance companies, in the Nifty50 rose by nearly a percentage point as on September 2019 (Q2FY19) compared to the previous quarter, with banking stocks attracting significant investor interest.

The share of DII holdings in the Nifty rose to 16.9% in Q2FY20, against 16% in the previous quarter. The highest DII interest was seen in IndusInd Bank that rose 6.40% sequentially to 16.96%. At the same time, HDFC Bank and Axis Bank witnessed an increase in DII holdings by 4.16% and 2.56%, respectively.

However, a dip in interest was seen in auto stocks with the sector suffering from a slowdown. In the September quarter, DII holdings in Tata Motors fell by 2.31% to 15.48% even as the company doubled its loss to `3,680 crore in Q1FY20, led by a slowdown in the automobile sector and a significant under-performance by the JLR unit. However, Tata Motors reported better results in the second quarter, following which shares rose 36% over six trading sessions.

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