FPIs further trim ownership in blue-chip stocks in December quarter

Foreign portfolio investors or the FPIs are value-hunters and have always been quality focussed. And sometimes they do not even spare the blue-chip stocks. An analysis of 22 stocks of Sensex whose information was available with the Ace Equity database shows that aggregate FPI ownership as a per cent of total public shareholding in these set of companies went down marginally from 37.8 per cent in September quarter to 37.3 per cent in the December 2019 quarter. It however, inched up 30 basis points compared to the December quarter of 2018. FPI ownership (as a per cent of total public shareholding) has dropped to a low of 36.9 per cent during the last quarter of fiscal 2019, in the past nine quarters, but after improving by 100 basis points to 37.9 per cent in the following quarter it has been declining.

In the third quarter of the current fiscal only eight of these 22 stocks saw a rise in their FPI ownership compared to the previous quarter. Some significant ones include IndusInd Bank where FPI raised stakes from 52.1 per cent to 55.2 per cent. This was followed by Tech Mahindra with an increase of 2.4 percentage points, over the last two quarters. The companies where these portfolio investors substantially trimmed their stakes in the past two quarters were Bharti Airtel (5.93 percentage points), Hero MotoCorp (1.2 percentage points) and Infosys (1.7 percentage points). A closer look at data reveals that since Q3FY19, FPIs have been incessantly selling their stakes in three stocks: Baja Auto from 16.1 per cent to 13.9 per cent, ITC from 17.1 per cent to 15.2 per cent and Ultratech Cement from 20.4 per cent to 17.6 per cent. 

Foreign portfolio investors are known for their investments in benchmark indices like the Sensex and Nifty but off late they have been reducing their stakes in Sensex companies. Aggregate ownership of FPIs as a per cent of total public shareholding in the 30-pack Sensex slightly reduced to 36.7 per cent in the September quarter from 36.9 per cent in the June quarter. They pulled out Rs 22,463 crore from the capital markets in the second quarter after investing over Rs 31,000 crore in the first quarter of this fiscal. The December quarter saw net inflows to the tune of Rs 44,937 crore.

Also read: FPIs remain net buyers in Jan; invest Rs 10,200 crore into equities

Also read: FPIs flock to Indian capital markets in big way; pump in Rs 1.3-lakh crore in 2019