Infosys, ITC, Bharti Airtel among large cap picks of FIIs last quarter

Indian stock indices have seen bulls again take control of the steering wheel from the bears, who had pushed the market to correct almost 15% from the recent peak. The bounce-back of the last few weeks has taken the top indices just 5% shy of the all-time high level.

Foreign portfolio investors (FPIs), or foreign institutional investors (FIIs), had become more cautious about investing in India over the last one year. In fact, in the October-December 2021 quarter, they were net sellers in Indian equities and pulled out over $5.1 billion in the process.

In the first six months of this year, they made their bearish sentiments apparent with net sales of securities worth over $35 billion on the cash equities side alone. In July, they tempered their mood and turned net buyers in August only to again press on the sell button in September. This month, too, they have been net sellers with around $600 million in net sales in the cash equity segment.

But it was not a one-way show.

We scanned through the list of companies that have disclosed their shareholding patterns to find companies where FIIs took a bullish stance and actually increased their holding in the quarter ended September 30.

In particular, they increased their stake in 80 companies that have a valuation of $1 billion or more last quarter. In comparison, they had bought additional stake in 68 companies and 60 companies that have a valuation of $1 billion or more in the previous quarter ended June 30 and March 31, respectively.

These numbers were still higher than the 41 such companies in which they lifted their stake during the quarter ended December 31, 2021. This shows FIIs have been more turning bullish on larger companies after the indices hit a peak last year.

Notably, they had been more bullish on these companies having bought additional shares of 89 such firms in the three months ended September 30 in 2021 and 83 such companies in the quarter ended June 30, 2021.

Of these 80 companies in which FIIs increased their stake, 62 companies were large caps. FIIs were bullish on selective IT, banking, FMCG, pharma, automobile and engineering stocks.

Top large caps that saw FII buying

If we look at the pack of large caps with a market valuation of Rs 20,000 crore ($2.6 billion) or more, then FPIs pushed up their stake in Infosys, ICICI Bank, HUL, SBI, Bharti Airtel, ITC, Asian Paints, Larsen & Toubro, Sun Pharma, UltraTech Cement, Adani Ports and NTPC.

ITC, Sun Pharma, Power Grid, Adani Power, Bajaj Auto, UPL, Cipla and Yes Bank were stocks where they have now upped stake for three straight quarters.

Although FIIs largely restricted their additional stake purchase to under 2%, some counters where they bought 1% or more stake include Infosys, Bharti Airtel, City Union Bank and Ashok Leyland.