FPIs dump banking, pharma stocks in March quarter: report

FPIs hiked their stake most in Max Financial Services by 8.4% to 33.5%, followed by SKS Microfinance, The Ramco Cement, Apollo Tyres and PVR, the report says

Foreign portfolio investors (FPIs) ownership – including American Depository Receipts (ADRs) and global depository receipt (GDR) – in the BSE-200 index dipped to $291 billion in the March 2016 quarter, down from $304 billion in the December 2015 quarter, suggests a Kotak Institutional report by co-authored by Sanjeev Prasad, senior executive director & co-head at Kotak Institutional Equities and Sunita Baldawa and Akhilesh Tilotia. 

Also Read: LIC raises holdings in 13 firms in March quarter

“In percentage terms, FPI’s holding in BSE-200 companies dipped to 24.5% in the March quarter, as against 24.8% in the December 2015 quarter. Heavy selling was seen in stocks in banking and pharmaceuticals sectors,” the report says.

The first quarter of calendar year 2016 (Q1CY16) saw the benchmark indices - the S&P BSE Sensex and the Nifty50 - slip nearly 3% each.


 

Among individual stocks, FPIs hiked their stake most in Max Financial Services by 8.4% to 33.5%, followed by SKS Microfinance, The Ramco Cement, Apollo Tyres, PVR and Kaveri Seed. Reliance Industries, Infosys, NTPC, Eicher Motors, Sun Pharma, Hindustan Unilever (HUL) and Tech Mahindra are some of the other frontline stocks that attracted FPIs.

Shriram Transport, LIC Housing Finance, Jain Irrigation, Crompton Greaves, Jaiprakash Associates, Suzlon Energy, Bank of India, Cipla, Dr Reddy’s Laboratories, Lupin, Torrent Pharmaceuticals, Aurobindo Pharma, ICICI Bank and Tata Motors are some of the stocks where FPIs pruned their stake in the March 2016 quarter.

Recently, the government inked a protocol with Mauritius that amends the double tax avoidance arrangement between the two nations. As per the protocol, capital gains arising in Mauritius from sale of shares acquired on or after April 1, 2017, in Indian firms will be taxed.

Investment by FPIs / FIIs (foreign institutional investors) – the key drivers of markets – in the equity segment during calendar year 2015 (CY15) stood at Rs 17,808 crore according to NSDL data. In the first five months of CY16 (till May 26 2016), they have already put in a net 13,177 crore in the equity segment. While the first two months of CY16 saw an outflow of Rs 16,647 crore, they invested Rs 21,143 crore in March, NSDL data show.

On the other hand, domestic institutional investors (DIIs) increased their stakes in sectors such as banking, utilities and pharmaceuticals, the Kotak report says, with their holding in the BSE-200 companies increasing to 11.1% in the March quarter from 10.9% at the end of the previous quarter.

“Among individual stocks, MFs increased stake in Suprajit Engineering, Engineer India and Container Corp; decreased stake in Ramco Cement, SKS Microfinance and PVR. LIC increased stake in IDBI, Oriental Bank of Commerce and Syndicate Bank; decreased stake in Indraprastha Gas, JSW Steel and ONGC,” the report adds.