FPIs hike exposure to Indian metals and mining companies, shows data

Foreign portfolio investors (FPIs) have raised their shareholding in domestic metals and mining companies this year amid a world-beating rally in their stock prices. On a year-to-date (YTD) basis, the FPI holding in Vedanta has increased 371 basis points (bps) to 11.9 per cent. Shares of Anil Agarwal group firm have surged 84 per cent this calendar year. Likewise, FPI shareholding in state-owned Nalco and Coal India has risen 54 bps each, while that in Hindustan Copper has jumped 130 bps. Hindustan Zinc (HZL), Jindal Steel and Hindalco are other companies in this space to see an increase in FPI shareholding.

What has piqued this interest? For one, stocks in metals and mining pack have been among the best-performers not just domestically, but globally as well. Shares of global mining majors BHP Group, Rio Tinto and Glencore are down over 12 per cent each this calendar amid uncertain outlook for the China economy.

Domestic companies have benefitted from robust production this fiscal. According to the data released by the Ministry of Mines, iron ore production increased to 98 MMT April-July 2024 from 90 MMT during the same period last year. Manganese ore production too jumped by 18.2 per cent from 1.1 MMT to 1.3 MMT during this period.

Domestic companies are also seen benefiting from the country’s substantial mineral deposits and cost benefits. For example, at $1,100 per tonne, the zinc production for HZL is among the lowest globally. Experts also say government initiatives like the National Infrastructure Pipeline (NIP), the PM Gati Shakti Mission and overall infra development are expected to buoy the demand for raw materials like coal, iron ore, and steel.