Foreign portfolio investors prune holdings in June quarter, shows data

Foreign portfolio investor (FPI) ownership in listed stocks has come off during the June quarter. Their holding in Nifty 500 stocks declined 60 basis points (bps) to 21.7 per cent, while that in Nifty50 stocks fell 40 bps to 27.4 per cent, as per an analysis done by Motilal Oswal Securities.
 
Even on a year-on-year basis, their holding has declined 90 bps and 140 bps in Nifty 500 and Nifty 50 stocks, respectively. Analysts say the decline in ownership is due to underperformance of financial stocks — the biggest overweight sector for FPIs.

“Financials has had a dominant run over the past few years. However, the sector (private banks, NBFCs, insurance, and state-owned banks) underperfor­m­ance has continued to reflect in the FPI allocation,” said a note by Motilal Oswal.
 
Also, buying by overseas investors slowed during the June quarter. Their net inflows stood at Rs 2,654 crore for three months ending June 2021. In comparison, they had pumped in Rs 55,125 crore in the preceding three months.
 
On an absolute basis, FPIs increased stake in 263 of 501 Nifty 500 stocks and 27 of 50 stocks in the Nifty50 index.