Hindustan Aeronautics, Reliance Power among 32 stocks where FIIs have upped their stake. Can they become multibaggers?

Until recently, Indian equities witnessed the ferocious selling by foreign institutional investors (FIIs) amid the ongoing global economic concerns. Only in the first seven months of 2022 till July 30, FIIs have sold shares worth rupees 2.9 lakh crore in the Indian equity market. However things started to change for the better in July with FIIs making a comeback. So far in the month of August as well, FIIs have been net buyers of Indian shares.

Data available with Ace Equity showed that as many as 32 stocks, listed in the BSE, where FIIs have increased their stake by at least 3 per cent in the last one year. Many market watchers consider FII buying as a bullish signal for a stock selection, and, in the past, stocks where FII has increased their stake have really performed well and provided decent returns to the investors.

KBC Global has seen maximum FII buying and their stake has reached to 21.1 per cent from 3.7 per cent one year back (increased 17.4 per cent), it was followed by Lancer Containers Lines, whose FII holdings reached to 13.6 per cent from 0 per cent (increased 13.6 per cent), Brightcom Group with FII holdings of 13.6 per cent from 0.2 per cent last year (increased 13.4 per cent), Gujarat Narmada Valley Fertilizers & Chemicals FII holdings of 22.6 per cent (increased 11 per cent) and Saregama India FII holdings of 17.3 per cent (increased 9.9 per cent).

Other stocks which also witnessed significant FII buying and foreign investors' stake has increased in the range of at least 3 per cent to 8.5 per cent, and includes names like KEI Industries, Ujjivan Financial Services, Ashiana Housing, Shaily Engineering Plastics, Reliance Power, Nava, Electrosteel Castings, VIP Industries , Everest Industries, Rain Industries, Polyplex Corporation, Chambal Fertilisers and Chemicals, LG Balakrishnan & Bros, Hindustan Aeronautics, Deccan Cements, Tamilnadu Petroproducts, SIS, Elgi Equipments, Oil India, Ambika Cotton Mills, Mold-Tek Packaging, Antony Waste Handling Cell, Sun Pharmaceutical Industries, KNR Constructions, Mirza International, VRL Logistics, Monte Carlo Fashions and Triveni Engineering & Industries.

Most of the successful investors suggest FII buying can be a good parameter for stock selection but it is not the only parameter many other factors are also needed to be analyze like financial performance of the company, management vision and capability, competitive advantage amongst other.