The September quarter was full of surprises for the markets and the investors alike. Whether it is the ongoing tariff war, which further heightened during the quarter, or the sudden spike in the US H-1B Visa fees by Trump, or the sluggish Q1FY26 earnings reports, or the depreciating Indian currency, all these took a toll on Indian markets as Foreign Institutional Investors (FIIs) again went on a selling spree during the quarter.
FIIs sold Indian equities worth ₹76,609 crore during the September quarter, again turning net sellers not only in the equity segment but overall, as well. This number is around double the equity investments FIIs made in India during the June quarter. (Source: NSDL)
Having said that, there are select stocks that FIIs bought during the quarter, taking the overall holding in those companies even above 25%. This is contrary to their overall stance on domestic equity.
So, let’s try to figure out what actually drove FIIs to these stocks and why they further increased their stakes at such an astounding pace.
#1 Yes Bank Limited (YESBANK)
Yes Bank Ltd. is the company where FIIs invested the most during the September quarter. FIIs increased their stakes by a whopping 20% points, taking the overall holding to 44.95% at the end of Q2FY26.
The key reason for this was the acquisition of a cumulative 24.2% stake by Sumitomo Mitsui Banking Corporation (SMBC) an FII. SMBC is now the largest shareholder in the bank, and is expected to play a key role in future management of the bank.
As we all know that Yes Bank is one of the leading private sector banks, offering a wide range of banking and financial services. It is the 6th largest private bank as per market capitalization.
Key Events/Achievements During Q2FY26
During the quarter, there were two developments, both of which signal (other than the stake purchase by SMBC) a sign of changing times at the bank.
First, India Ratings & CRISIL upgraded the credit rating of the private bank to AA-. It is the highest rating it has received since March 2020, and this perhaps indicates improvement in the governance of the bank, strengthening capital position, and, most importantly, improved business performance.
Second, the bank already opened 43 new branches across the country within Q2FY26, while the yearly target is 80 branches for FY26. This is perhaps a sign of growing confidence in the bank, which had earlier had a near brush with bankruptcy.
Apart from the good things, Yes Bank also faced some challenges during the quarter regarding illegal loans worth ₹3,000 crore, which the bank allegedly disbursed to the Anil Ambani Group around 10 years ago. The Enforcement Directorate (ED) has been actively looking into the matter; however, this did not seem to affect the buying decision of FIIs.
Business Growth & Efficiency
During the September quarter, the Net Interest Income (NII) of the bank went up from ₹2,200 crore in Q2FY25 to ₹2,301 crore, growing at 4.6% Year-on-year (YoY).
The advances from the retail banking division grew by 2.4% YoY during the quarter from ₹1,17,934 crore in Q2FY25 to ₹1,20,802 crore in this September quarter.
Similarly, advances from commercial banking division went up from ₹53,610 crore to ₹62,430 crore, and from corporate and institutional banking it went up from ₹63,573 crore to ₹66.980 crore. The total net advances went up from ₹2,35,117 crore to ₹2,50,212 crore, growing at 6.4% YoY.
The retail & branch banking led deposits grew from ₹1,51,322 crore to ₹1,71,978 crore, a 13.7% rise YoY. The total deposit went up from ₹2,77,214 crore to ₹2,95,289 crore, a 6.5% YoY increase.
The Net non-performing asset (NNPA) decreased from 0.5% in Q2FY25 to 0.3% during this July-Sep quarter. However, the gross NPA remained flat at 1.6%.
The bank has also been increasing its presence in the MSME sector, and its fund book for the sector has been growing steadily. During Q2FY26, the MSME fund book went up from ₹17,464 crore in Q2FY25 to ₹19,546 crore in Q2FY26.
Also, Yes Bank is penetrating more into the rural markets, which are emerging with its SME Direct Services Desk and other services specifically designed for Agricultural loans.
Mixed Financials
Even though the business grew, the overall revenue of Yes Bank declined by 4.5% YoY from ₹7,737 crore in Q2FY25 to ₹7,389 crore in Q2FY26. However, that didn’t stop the bank from growing its profits. The net profit jumped 17% YoY, from ₹567 crore to ₹664 crore during the period.
Valuation
The stock is trading at a Price/Earnings (PE) ratio of 25x, which is significantly higher than the industry median of 14.7x, indicating a premium valuation of the company.
Top FIIs buying stakes in Yes Bank during Q2FY26
- Sumitomo Mitsui Banking Corporation bought 24.21% stakes during the quarter
1-year Share Price Chart of Yes Bank
#2 Paisalo Digital Limited (PAISALO)
Paisalo Digital Ltd., a non-deposit taking, non-banking Financial Company (NBFC), is second on the list of companies where FIIs invested during the September quarter. FIIs increased their stakes by 12.81% points during the quarter, taking the total holding in the company to 20.89% at the end of Q2FY26.
The NBFC offers loans for small businesses under different schemes such as Umeed, Pragati, Udaan, and Vikas Loans. The company also offers financing options for vehicles such as auto rickshaws, two-wheelers, tempos, and electric rickshaws, which are used for generating income. Apart from the small business loans, Paisalo Digital also offers corporate loans up to ₹5 crores.
Business Growth & Efficiency
The strong business growth can be one of the reasons why FIIs heavily invested in this company during the quarter. The Net interest income of the company went up by 20% YoY to ₹124.4 crore during Q1FY26. The Net interest Margin (NIM) grew by 31 basis points (bps) to 6.5% during the same quarter.
The company efficiently brought down the borrowing cost by 161 bps to 10.7% which is quite significant, and its loan disbursement for Q1FY26 grew by 16% YoY to ₹758.1 crore. The Asset Under Management (AUM) grew by 14% YoY to ₹5,230.2 crore during the same period.
The asset quality of the business has improved every quarter. During Q4FY25, the NNPA stood at 0.76%, which dropped to 0.68% during Q1FY26. The GNPA also came down from 0.99% to 0.85% during the period.
Business Expansion and Growth Partnerships
Paisalo Digital added 50 branches and 432 touch points during Q1FY26, which expanded its wide presence further and took the total number of touch points to a whopping 3,997 across 22 states of the country.
To fund MSMEs and SMEs, the company entered into a co-lending partnership agreement with SBI, besides their existing partnership since 2019. The management of the company believes that this new partnership can further strengthen the bond between both companies and also increase their reach in the credit delivery space in India. The operations under this new partnership are expected to commence from Q4FY26, where Paisalo’s digital platform will amalgamate with SBI’s vast banking network to improve formal credit access for the small businesses, which are mainly from the Tier 2 and Tier 3 cities.
Strong Financials
The revenue of the NBFC has gone up from ₹187 crore in Q1FY25 to ₹219 crore in Q1FY26, growing at 17.2% YoY. Similarly, the net profit for the period surged from ₹41 crore to ₹47 crore, which is a 13.7% growth.
** Financial Results for the Q2FY26 are yet to be announced.
Valuation
The stock is trading at a PE of 16.1x, which is significantly lower than the industry median of 23.3x, indicating a cheap valuation for the NBFC.
Top FIIs buying stakes in Paisalo Digital during Q2FY26
- Antara India Evergreen Fund Ltd bought 4.5% stakes
- Maybank Securities Pte Ltd. – Odi bought 4.35% stakes
- Sparrow Asia Diversified Opportunities Fund bought 3.17% stakes
1-year Share Price Chart of Paisalo Digital Ltd.
#3 Medi Assist Healthcare Services Limited (MEDIASSIST)
Medi Assist Healthcare Services Ltd., offering health-tech and insurance-tech services, is third on the list of the FIIs’ top picks for the September quarter. FIIs increased their stake in Medi Assist by 11.94% points, taking the total holding to 25.83% at the end of the September’25 quarter.
Medi Assist is engaged in managing health insurance for employers, retail members, and public health schemes by collaborating with different insurance companies. It helps employers, organizations with insurance purchase to claim processing and also offers customer services, network management, policy administration, etc. Medi Assist also offers services such as Data Driven Analytics, value-added services, and member engagement solutions to the insurers as well.
Market Leadership
Medi Assist is the leading company operating in this space with a 32.2% market share in the group insurance business, as of 30 September 2025. This is perhaps the single biggest reason why FIIs remain interested in the stock. Medi Assist is a great way to participate in the insurance theme in India.
In the retail segment, the company holds a market share of 5.3%. The company has a retention rate of 93.4% making a strong, loyal customer base for the company. It manages over 10,700 corporate accounts.
Innovation as the Key
The company’s core strength lies in its striving for innovation and creating value with it. The current portfolio of tools and technology that the company offers includes –
- MAven Navigator: It helps in determining out-of-pocket expenses estimates
- Raksha Prime: Thisplatform enhances checkouts and discharge processes
- Maven Insights: This is a data-driven tool for analyzing consumption patterns, portfolio analysis on a real-time basis in the public domain
- Maven Global: Thisis a proprietary global benefits management technology platform with multi-currency caps, global payment gateway integration, and geographic benefits.
- Consent Feature: This feature helps in making the services more efficient, which in turn reduces the customers’ grievances.
Financial Growth
During Q2FY26, the sales grew by 28.64% YoY to ₹232.55 crore from ₹180.77 crore in Q2FY25. However, the net profit for the period tanked from ₹21 crore in Q2FY25 to ₹8.07 crore in this September quarter, which is a 62% decline YoY.
Valuation
The stock is trading at a PE of 46.4x. There are no peers for comparison.
Top FIIs buying stakes in Medi Assist during Q2FY26
- Massachusetts Institute of Technology (MIT) bought a 3.89% stake
Note: In October 2025, after the end of the quarter, the company had a preferential issue.
1-year Share Price Chart of Medi Assist Healthcare Services Ltd.
Other Companies FIIs increased stakes by 5% during Q2FY26
- IDFC First Bank: FIIs increased their stakes by 11.07% points, taking total holding to 35.06%.
- Knowledge Marine & Engineering Works: FIIs increased their stakes by 10.40% points, taking total holding to 10.88%.
- AWL Agri Business Ltd.: FIIs increased their stakes by 9.50% points, taking the total holding to 14.11%
- Sai Life Sciences Ltd.: FIIs increased their stakes by 7.92% points, taking the total holding to 22.49%
- Authum Investment & Infrastructure: FIIs increased their stakes by 6.17% points, taking total holding to 22.49%.
- Blackbuck Ltd.:FIIs increased their stakes by 5.68% points, taking total holding to 26.20%.
Wrapping Up
Despite the overall massive sell-off by FIIs during the September quarter, select stocks witnessed significant investment by FIIs, which indicates the long-term value propositions in the domestic market. These investments are mostly driven by exceptional business growth and prospects, strategic innovation, market leadership, and expansion plans.
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
Disclaimer:
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
