Zee, Apollo Hospitals, Tech Mahindra among large caps shunned by FIIs last quarter

Indian stock indices are raring to go and test the peak attained last October-November, after swinging back and forth over the last three months. The top indices are just around 2% shy of the all-time high.

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, FIIs had made their bearish sentiments apparent with net sales of equity securities worth $25 billion. This changed last month with FIIs being net buyers in the equity market after several months.

We scanned through the list of companies that have disclosed their shareholding patterns to get names where FIIs have cut stake. In particular, they sold stake in as many as 81 companies that have a valuation of $1 billion or more last quarter. This is much less the 92 companies where they divested shares in the preceding quarter.

They were bearish on all large banks and financial services firms, top IT and FMCG companies, selective auto, pharma, telecom, engineering, real estate and cement stocks.

Top large caps

FIIs cut stake in around 50 large caps in the last quarter, as against 69 large caps with a market capitalisation of Rs 20,000 crore or more where they trimmed their holding in the January-March period.

Reliance Industries, TCS, HDFC Bank, Infosys, Hindustan Unilever, ICICI Bank, State Bank of India, Bharti Airtel, HDFC, Kotak Mahindra Bank, Adani Enterprises and Bajaj Finance were among the top large caps where FIIs turned bearish.

The FIIs had sold shares in many of these companies in the previous quarter, too.

Among others, Asian Paints, HCL Technologies, Wipro, Adani Enterprises, Bajaj Finserv, L&T, Maruti Suzuki and Axis Bank also saw offshore investors snip their holding during the quarter ended June 30.

If we look at large cap stocks where FIIs sold 2% of more stake last quarter, we get a set of five names with Zee Entertainment topping the charts, having seen a sharp selling by foreign portfolio investors.

Hindalco, Tech Mahindra, HDFC Bank and Apollo Hospitals were the other large caps that witnessed a sharp swing with FIIs turning sellers.

Zee Entertainment had also seen FIIs sell a large stake in the preceding quarter.