FIIs have cut stake in these 12 large caps. Do you own any?

Indian stock indices have scaled new highs and are now consolidating near their peak but are now seeing a rush of money towards large cap counters as investors, anticipating a correction from these levels, are looking at some comfort factor rather than betting on high-beta mid- and small-cap stocks.

Foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) have become more cautious about investing in India but looking at their behaviour it seems they have been bullish about large caps for the last few months.

Quarterly shareholding data shows they pushed up their holding in as many as 83 listed companies that have a valuation of $1 billion or more. At the same time, they also snipped their stake in as many as 23 companies.

Top large caps that saw FII selling

FIIs cut stake in around a dozen large caps, or companies that currently have a market capitalisation of Rs 20,000 crore or more.

Essel Group flagship Zee Entertainment saw the most distinct selloff by offshore investors as the company had been a rank underperformer over the past year because of corporate governance concerns.

FIIs cut their stake from 64.1% to 57.4% in Zee Entertainment, the country’s most valued publicly listed media and entertainment company, during the quarter ended June 30. The Zee Entertainment scrip, which counted as many as 524 FII shareholders as of March 2021, saw 218 of them exit the company last quarter.

Zee Entertainment, in which the promoters now own just 4% stake, has been facing calls from institutional investors for a change of guard. Indeed, with the resignation of Manish Chokhani and Ashok Kurien from the board on Monday, the company’s stock shot up 40%, to near a 52-week high on Tuesday.

Other large cap companies where FIIs reduced their stake last quarter by 2% or more include commodities major Vedanta, whose share price has more than tripled since December last year.

Hospitals, auto, BFSI stocks

Offshore investors also sold stake in companies across the healthcare, automotive and banking, financial services and insurance (BFSI) space during the quarter through June.

These companies were hospital chains Max Healthcare and Fortis Healthcare, two-wheeler maker Hero MotoCorp and automaker Mahindra & Mahindra Ltd.

The three BFSI stocks that lost favour among FIIs were Shriram Transport Finance, SBI Life Insurance and YES Bank. 

The other companies where the FIIs lowered their holdings were Jockey-branded innerwear maker Page Industries, Adani Ports and Tech Mahindra.

The stake sale in Tech Mahindra showed FIIs churned their IT portfolio as they had increased their stake in India’s second- and third-largest software services exporters—Infosys and Wipro, respectively—during the same period.