Where is the money flowing? FIIs churn consumption basket, favour fintech

Indian stock markets are seeing a shift in investment patterns between foreign and domestic investors. Foreign Portfolio Investors (FPIs) are increasingly putting their money into Consumer Services and Financial Technology (Fintech) companies, while Domestic Institutional Investors (DIIs) are focusing on Consumer Durables and well-diversified firms, according to an analysis by YES Securities. 

Other key points: 

Promoter Stake Rise:  For the third consecutive quarter, promoters have increased their holdings ("skin in the game"), driven by reshuffling within the NSE 500 index and higher promoter stakes in major companies like Ambuja Cement and ICICI Lombard. This suggests promoters' confidence in the long-term prospects of their businesses.

FPI Holdings Decline:  Foreign Portfolio Investors (FPIs) have significantly reduced their holdings over the past two quarters. This could be due to various factors, including global market volatility or seeking better opportunities elsewhere.

Retail Dip Despite Demat Account Surge:  Retail investor participation has surprisingly dipped despite a significant rise in Demat accounts. This suggests new account holders might be primarily engaging in the Futures and Options (F&O) segment rather than buying equities directly.

MNC Promoters Cashing In:  Multinational Corporation (MNC) promoters like ITC and Whirlpool capitalized on high domestic market valuations by selling stakes last quarter, rewarding their shareholders abroad. Domestic Institutional Investors (DIIs) stepped in to absorb some of these shares, with DIIs increasing their stake in Whirlpool by 21%.

FIIs churn Consumption basket, favour Financial Technology stocks

Source: Yes Securities

DIIs gobble Whirlpool, Swan Energy and Aavas in Promoter Block Deals. They also absorb FIIs selling in Kalyan Jewellers. DIIs and FIIs synchronize their selling in Zee Entertainment

Investors flock to HDFC Bank amid the recent fall in the share price, while IPO investors finally find a profitable exit in LIC

Trends: The Zee Entertainment debacle led to a sharp decline in FPI and DII stakes in the Media sector. Conversely, FPIs have been upping their investments in Consumer Services and Financial Tech, while DIIs are boosting their stakes in Consumer Durables and diversified companies.

Change in Shareholders in percentage terms

Sector-wise change in Shareholding Pattern