Global investment in Indian banks to continue on robust finances: S&P unit

Majority of foreign institutional investors' holdings concentrated in biggest private banks

Indian banks will continue attracting global investment from investors looking for better returns as credit growth, improved margins and stable asset quality boost the country’s lenders, S&P Global Market Intelligence has said.

The total market value of foreign institutional investors' holdings in Indian banks has increased to Rs 8.36 trillion as on June 30 from Rs 7.71 trillion the year before, it said. Holdings were worth Rs 6.734 trillion in June 2020.

A majority of foreign institutional investors' holdings — 93.5 per cent of the value as on June 30 — is concentrated in India's biggest private banks. Top lenders that attracted foreign institutional investors include ICICI Bank, HDFC Bank, and Kotak Mahindra Bank.

The market value of foreign institutional investors' holdings in Indian private banks increased to Rs 7.82 trillion in June from Rs 7.29 trillion a year ago. The value stood at Rs 6.373 trillion as of June 2020.

On the other hand, the market value of foreign institutional investors' holdings in state-owned Indian banks clocked in at Rs 541 billion as of June compared to Rs 422 billion a year ago.

US-based Capital Research and Management Co sat atop the list of foreign investors in Indian banks by market value, followed by BlackRock Inc. and Singapore's GIC Private Ltd.