FIIs cut stake in these small-cap stocks in Q3. Do you own any?

Indian stock indices are in the midst of bloodbath, leading to a sharp fall in stock prices after the market tested its previous all-time peak just a week ago. The top indices have lost more than 7% over the last one week.

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

In the first three weeks of this year, too, they had shown their bearish sentiments apparent with net sales of securities worth $1.1 billion.

We scanned through the list of companies that have disclosed their shareholding patterns to find out the stocks where FIIs have cut their stake. In particular, they sold stake in as many as 67 companies that have a valuation of $1 billion or more last quarter.

However, the selloff was more pronounced for small-cap firms.

Small caps that saw FII selling

FIIs cut stake in around 120 small and micro caps, or companies that currently have a market capitalisation of less Rs 5,000 crore, during the quarter ended Dec. 31, 2021.

Mahindra Logistics, Tejas Networks, Indo Count, IFB Industries, GRM Overseas, TCNS Clothing, Craftsman Automation, Hindustan Foods, Jamna Auto, Neogen Chemicals, Kennametal India, Sequent Scientific, Newgen Software, Sansera Engineering, Hemisphere Properties and HG Infra Engineering were among the larger small-caps that witnessed an FII selloff.

Among others, Jammu & Kashmir Bank, Railtel Corporation, Indoco Remedies, Ami Organics, Spicejet, JK Paper, ICRA, India Pesticides, Indostar Capital, Healthcare Global, Rolex Rings, Jindal Saw, Ujjivan Small Finance Bank, Paushak and Dodla Dairy also saw offshore investors snip their holding during the quarter.

Lower down the order within the small-caps are companies such as Meghmani Organics, GTPL Hathway, Heranba Industries, Mas Financial, Somany Home, Future Retail, Paras Defence, Techno Electric, Optiemus Infracom, Best Agrolife, Jai Corp, Confidence Petroleum, Spandana Sphoorty, Krsnaa Diagnostics and Apollo Pipes.

If we look at small and micro-cap stocks with a valuation of at least $100 million, or Rs 750 crore, where FIIs sold 2% of more stake last quarter, we get four names: Sequent Scientific, Paras Defence, Spandana Sphoorty and Ritesh Properties.