Foreign institutional investors (FIIs) are back with a bang in the domestic equity market with net inflow of Rs 33,980 crore in March amid hopes of the Modi government coming back to the power.
Recording highest monthly inflows, FIIs’ gross purchases in Indian equities in FY19 stood at 1,50,057 crore and gross sales at Rs 1,16,076 crore.
They infused more than Rs 51,000 crore in February and March after being net sellers of shares worth Rs 4,262.01 crore in January.
Heavy buying by FIIs gave a boost to an otherwise dull market. The BSE Sensex rallies some 8 per cent between February 15 and March 29, rising from 35,809 to from 38,672, to end the year with a net gain of 17 per cent.
Hemang Jani, Head-Advisory, Sharekhan by BNP ParibasNSE -1.90 %, said the buying was led mainly by FIIs which pumped in over Rs 45,000 core into domestic equities in the past few weeks. “Any rate cuts in developed markets such as the US or Europe may result in steady inflows for emerging markets (EM),” he said.
Nilesh Shah, MD, Kotak AMC, says FIIbuying is likely to continue even post-election.
If capital flow is any indicator, chances are foreign investors will ramp up exposure to some of the companies where they gradually raised their bets all through last year.
FIIs increased holdings in as many as 61 BSE-listed companies during the past four successive quarters. They included Adani Transmission, Agro Tech Foods, Amara Raja Batteries, Atul, Au Small Finance Bank, Avenue Supermarts, Century Textiles, ICICI Lombard General Insurance, Indiabulls Ventuers, JSW Holdings, KCP, Jubilant FoodworksNSE -1.31 %, Kiri Industries and Westlife Development.
Domestic brokerages are bullish on some of the stocks mentioned in the list. For instance, HDFC Securities has a ‘buy’ call on Jubilant FoodWorks with a price target of Rs 1,750. Antique Stock Broking is bullish on Sunteck Realty with a target price of Rs 550.
As many as 44 companies on this list advanced up to 35 per cent in last two months, suggesting FIIs could be potential buyers on these counters. Shares of Suven Life Sciences, Sunteck Realty, AstrazenecaNSE -0.99 % Pharma, Tata Communications, Kiri Industries, Ultramarine & Pigments and Mold-Tek Packaging delivered double-digit returns to investors during February-March.
Thirty companies on the list delivered positive returns to investors in last one year with Astrazeneca Pharma and JSW Holdings advancing up to 115 per cent. They were followed by Soril Infra (up 57.79 per cent), TCI Express (up 57.40 per cent), Suven Life (up 55 per cent) and International Paper APPM (up 53 per cent).
Shares of Intrasoft Technologies, Shankara Building Products, Simplex Infra, Binani Industries, Aksharchem (India), Sundaram-Clayton and KCP declined between 35 and 82 per cent in the same period.
December quarter shareholding data showed HDFC was the most favoured firm of FIIs, who held 72.20 per cent stake as of December end 2018, compared with 74.80 per cent at the end of December 2017.
Bharat Financial Inclusion, Indiabulls Housing Finance, IndusInd BankNSE 1.81 %, Shriram Transport Finance Company, Axis Bank, Apollo Hospitals Enterprise and Birlasoft were other companies where FIIs held over 45 per cent stake as of December 31, 2018.