Usually, they do not agree, but when they do, it’s got to be something worth taking notes. Wondering who they are and what this is all about?
So, they are the institutional investors, both foreign and domestic ones, who often, with their heavy buying or selling, decide the course of the market.
For quite some time now, Foreign institutional investors (FIIs) have been fleeing from the Indian equity markets, and during the July-September quarter, they also sold Indian equities worth ₹76,609 crore. (Source: NSDL)
However, the domestic institutional investors (DIIs) are holding on to India’s growth story and continuing their buying spree. They bought domestic equities worth ₹1.64 lakh crore during the same period, pulling the overall market upward. (Source: SEBI)
While it seems that FIIs and DIIs have different stances on the Indian equities, there are select stocks where they both agree and invested heavily during the quarter. Here in this article, we will try to explore two such stocks where both FIIs and DIIs increased their stake by a minimum of 5% points during Q2FY26.
Let’s try to understand what actually brought these institutional investors together.
#1 Utkarsh Small Finance Bank Limited (UTKARSHBNK)
Utkarsh Small Finance Bank Ltd., a small finance bank with significant presence in the rural and semi-urban regions in India, is the stock that garnered the most attention from FIIs and DIIs. While DIIs increased their stake in the bank by 7.92% points, FIIs increased it by 11.22% points. The current DII holding is 10.70% while that of the FIIs is around 13.07%.
So, what made both FIIs and DIIs invest at such an astounding pace in this stock?
Focus on Under-Penetrated Regions
One of the unique selling propositions of this small finance bank is its widely diversified distribution network. Even in 2025, there are many regions in the country that are not thoroughly penetrated by the banking system. While new-age banking uses AI, there are still people without smartphones who rely on the physical banking network, and Utkarsh tries to reach these people.
The bank has 1,104 banking outlets across 27 states and Union Territories of India. It has 778 micro-ATMs, 306 ATMs, along 296 Unbanked Rural Centres (URCs) as of the end of Q2FY26.
Out of all the states, this small finance bank earlier mainly targeted the most underpenetrated areas of Bihar and Uttar Pradesh, and there it has over 280 and 227 banking outlets out of a total of 1,104 currently. However, now they are slowly expanding the focus to the new geographies, and the contribution from the Bihar and UP network is anticipated to reduce over time.
Diversified Asset Portfolio
Apart from the wide reach of the bank, it is continuously diversifying its asset base and mainly focusing on star products such as Micro-banking business loan (MBBL) and Micro LAP.
The MBBL disbursement grew by 87% Year-on-year (YoY) from ₹163 crore in Q2FY25 to ₹305 crore in this September quarter (Q2FY26).
They are shifting from Joint Liability Group Loans (JLG) towards more individual loans, affordable housing loans, and other products.
The bank is also offering working capital loans and term loans to the Micro, Small, Medium Enterprises (MSMEs) and institutional customers as well.
The share of secured loans also increased to 47% of their entire loan portfolio, which is another significant growth factor for the bank.
The MSME lending increased, which surged the portfolio outstanding by 33% YoY from ₹3,128 crore in Q2FY25 to ₹4,164 crore in Q2FY26. Similarly, the housing loan portfolio increased by 21% YoY, from ₹ 785 crore to ₹947 crore during the quarter.
However, their Construction Equipment (CE) and Commercial Vehicle (CV) lending was sluggish during the quarter.
Deposits Growth
The bank also witnessed a sharp rise in the total deposits by 10% YoY. Retail term deposits played the most important role here as they grew by a whopping 29% YoY during the quarter from ₹9,518 crore in Q2FY25 to ₹12,257 crore in Q2FY26.
Asset Quality
While the bank has been growing its network and disbursement has been surging, its asset quality degraded in the September quarter. The gross non-performing assets (GNPA) surged to 12.4% in Q2FY26 from just 3.9% a year back. Similarly, the Net NPA was 0.9% back in Q2FY25, which has surged to 5% in this quarter ending on 30 September 2025. This huge surge has been primarily a result of slippages in the microfinance (JLG) segment. However, as the company is shifting its focus from JLG to MBBL, the numbers are expected to improve.
Financials
Coming to the financials of the bank, during the July-September quarter, revenue generation was ₹840 crore, 14.9% down from ₹987 crore of revenue generated in Q2FY25. It’s not just the drop in revenue, but the bank suffered a loss of ₹348 crore during the quarter as well. This was largely on account of bad loan provisions.
However, the management referred to this loss as “stress has peaked,” and this July-September quarter is a reset quarter for them when they are making the shift from JLG to MBBL loans. Management also stated that they are expecting the numbers to get better in this Q3FY26 and further grow from Q4FY26.
Perhaps the FIIs and DIIs see this turnaround playing through and are positioning themselves to profit from it.
Valuation
The Price-to-book value (PBV) ratio of Utkarsh Small Finance Bank is currently 1.25, at par with the industry median of 1.24, which indicates that the stock is fairly valued at the moment.
1-Year Share Price Chart of Utkarsh Small Finance Bank Limited
#2 Sai Life Sciences Limited (SAILIFE)
Sai Life Sciences Ltd., a Contract Research, Development, and Manufacturing Organization (CRDMO), is the other stock that both FIIs and DIIs purchased at a breathtaking pace in the July-September quarter. FIIs increased their stake by 7.92% points, taking the total holding to 22.5% while DIIs increased their stake by 8.31% points, taking the overall holding to a whopping 29.9% at the end of the quarter.
So, what has caught the eyes of these institutional investors? Let’s find out.
Global Presence
This Hyderabad-based pharmaceutical firm is one of the leading CRDMOs globally with extensive presence in the US and European markets. There are more than 300 active customers of the firm across the US, EU, Japan, and the UK.
It is globally accredited by the USFDA and PMDA with a 100% track record in every regulatory inspection across research and development as well as manufacturing units.
One-stop Solution
This pharma company is a one-stop platform for the discovery, development, and manufacturing of drugs. The company deals in Medicinal chemistry and computational drug discovery. It is also engaged in pharmacology research, toxicology services, pre-clinical research, and other discovery methods as a Contract Research Organization (CRO).
As a CRO and Contract Development and Manufacturing Organization (CDMO), it is engaged in process development, optimization, analytical development and validation, formulation development, stability studies, clinical trial supplies, and also regulatory compliance and quality assurance.
As a CRDMO, it is engaged in the manufacturing of Active Pharmaceutical Ingredients (APIs), technology transfer and scale-up processes, commercial production of drugs and APIs, and global supply chain management, along with complying with the regulatory standards globally.
Business outlook
The company is already aligned with its capex plan of ₹700 crore for FY26 to boost its manufacturing and research facilities, and is also developing a new manufacturing site at Hyderabad. These capex investments are expected to double the manufacturing capacities of the company by FY27. The current capacity is around 700KL, which is expected to reach 1,150 KL by the end of FY26 and further grow in FY27.
There are 160 molecules already in the early phase of development, with 36 active molecules that can further boost the business and build stronger client relationships. Then it has over 40 programs which are already in the IND phases. The company also has 5 of its Molecules which are currently progressing from the discovery stage to the market phase.
Financials
The sales of Sai Life grew from ₹396 crore in Q2FY25 to ₹537 crore in Q2FY26, a growth of 35.9% YoY. The profit doubled during the period from ₹42 crore to ₹84 crore.
Valuation
The stock is trading at a Price-earnings (PE) ratio of 63.4X, which is way higher than the industry median of 31.1X, indicating a premium valuation.
Share price chart of Sai Life Sciences Limited (Since Listing on 18 December 2024)
Wrapping up
FIIs and DIIs investing in the same stock is a rare sight, but when they do, there must be something that needs to be explored, isn’t it? These two stocks are from two different industries, but have gathered equal importance from both institutional investors. While Utkarsh couldn’t perform well during the July-September quarter, Sai Life has a massive growth. And this shows the institutional investors are perhaps looking at the prospects of these two companies rather than just their current financials.
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.
