FIIs have been bearish on many mid-cap stocks. Find out more

Indian stock indices are consolidating after hitting a new peak even as investors, anticipating a correction form these levels, are looking at shuffling their portfolio.

Foreign portfolio investors (FPIs) or foreign institutional investors (FIIs) had become more cautious about investing in India but they did pump in more money into a clutch of midcap stocks over the past few months.

On the flip side, quarterly shareholding data shows they also decreased their holding in more than 200 listed companies. Of these, the offshore investors pushed down their stake by two percentage points or more or nearly one in three companies.

There were at least 54 mid-cap stocks with current market valuation ranging from Rs 5,000 crore to Rs 20,000 crore where FPIs cut stake during the July-September quarter. This is just marginally lower than 57 mid-cap stocks where they bought additional stake last quarter. Interestingly, FIIs had sold shares of an equal number of companies (54) in the previous quarter ended June 30.

If we compare with the quarter ended June 30, there were many mid-caps that have seen FPIs cut stake for consecutive quarters. These include Thyrocare, Jubilant Ingrevia, Just Dial, Manappuram Finance, Natco Pharma, auto component maker Mahindra CIE, Apollo Tyres, CESC, City Union Bank and Redington.

A sector-wise analysis shows companies where FIIs cut stake in July-September are spread across a wide range of sectors. These are healthcare and pharmaceuticals, financial services, construction, engineering and industrial, logistics, technology and auto ancillaries.

Top mid-caps where FIIs cut stake

Among the largest mid-caps that saw offshore portfolio investors turn bearish during the three months ended September 30, 2021, are hospital chain operator Fortis Healthcare, real estate developer Phoenix Mills, gold loan financier Manappuram Finance, and mid-sized drugmakers Natco, Alembic and Glenmark.

Apollo Tyres, Affle India, Firstsource Solution and Cyient were among the other companies in the list.

FIIs also diluted stake in RBL Bank, City Union Bank, CESC, Amara Raja Batteries, Lux Industries, Route Mobile, Redington, Indiabulls Housing Finance, Laxmi Organic, Jubilant Ingrevia, Mahindra CIE and Zensar Technologies.

A quick look at the basket of companies commanding a market capitalisation of $1 billion or more where FIIs snipped their holding last quarter throws up a few more names.

These include Jubilant Pharmova, Century Textiles, CreditAccess Grameen, KIMS Hospitals, MCX, McDonald’s franchisee Westlife, Allcargo Logisics, Shyam Metalics, P&G Health, Dilip Buildcon, Mastek, Sobha, eClerx, IRB Infra, Kalyan Jewellers, V Mart and Delta Corp.

Mid-caps where FIIs sold 2% or more

Foreign portfolio investors cut their stake by over 2% in 20 mid-cap firms. These included names like Just Dial, Jubilant Ingrevia, Indiabulls Housing Finance, Tejas Networks, Allcargo Logistics, Religare Enterprises, RBL Bank, eClerx Services, Cyient and MCX.

Of these, Just Dial has been acquired by Reliance Industries while Tejas has been bought by Tata Group.

Laxmi Organic, Chalet Hotels, BSE, Greenpanel, Apollo Tyres, Mahindra CIE, Redington (India), Phoenix Mills, Affle (India) and Great Eastern Shipping were the other mid-caps where offshore investors diluted significant stake.