Markets mostly have been a one-way street since the presentation of Union Budget on July 5 when the government proposed to increase tax on foreign portfolio investors (FPIs) up to 42 per cent. Following the proposal, overseas investors pulled out over Rs 11,000 crore (nearly $2 billion) from Indian equities in July, the steepest outflow in nine months. In the first two sessions of August, they withdrew a net Rs 2,881 crore, data show.
Last week, however, the government held meetings with representative of FPIs to assuage their concerns and reports suggest it may come up with measures to recover the overseas investors' trust in the Indian markets. CLICK TO READ FULL REPORT
That said, there are over 80 companies where foreign institutional investors (FIIs) have continuously increased their holding in the last four quarters, and around 30 firms where they have raised their holding by 50 per cent.
Some of the prominent firms where FIIs increased their stake phenomenally include Mishra Dhatu Nigam (up 5,700 per cent), Astrazeneca Pharma India (382 per cent), L&T Technology Services (171 per cent), AU Small Finance Bank (up 141 per cent), Aster DM Healthcare (up 116 per cent), Greaves Cotton (up 115 per cent) and Aarti Industries (up 103 per cent).
Companies where FII holding has increased over 50 per cent but less than 100 per cent include Bata India (up 78 per cent), Endurance Technologies (up 66 per cent), Trident (up 66 per cent), Coal India (up 66 per cent), Granules India (up 63 per cent), Vaibhav Global (up 52 per cent) and Usha Martin (up 51 per cent).
BETTING BIG ON INSURANCE
These FIIs, ACE Equity data shows, are betting big on insurance companies. For instance, the FII holding in SBI Life Insurance Company (SBI Life) jumped around 351 per cent to 19.42 per cent in the quarter ended June 30, 2019. In the year-ago period, their stake in SBI Life stood at just 4.31 per cent. Similarly, ICICI Lombard General Insurance saw FII holding increase by 157 per cent to 18.53 per cent, as compared to 7.20 per cent in the corresponding quarter of the previous fiscal.
In HDFC Asset Management Company, they have raised their stake by 81 per cent to nearly 5 per cent from 2.61 per cent in the year-ago quarter, ACE Equity data show.
At the bourses, stocks of most insurance companies have given a decent return in the last one year (till June quarter). While the shares of ICICI Lombard have spurted 40 per cent, those of SBI Life have risen nearly 7.5 per cent. The benchmark index S&P BSE Sensex, on the other hand, have surged around 19.50 per cent during the same period.
Shares of HDFC AMC, which debuted on the bourses on August 6, 2018, have gained 13.5 per cent till the end of June quarter, ACE Equity data show.
On the fundamental front, SBI Life posted an increase of 5 per cent in its net profit at Rs 371.9 crore in the June 2019 quarter, while gross written premium during April-June period of 2019-20 grew 41 per cent to Rs 6,690 crore as against Rs 4,760 crore a year ago. Asset under management (AUM) of the company stood at Rs 1.47 lakh crore as on June 30, up 22 per cent from Rs 1.20 lakh crore a year earlier.
“Overall operating metrics remain steady, growth has been relatively strong with it being in top three players and significant opportunity of penetration in its parent clientele will augur well. We maintain 'buy' with the revised target price of Rs 906 (from Rs 779) implying 2.9x multiple on Mar-21 EV," commented analysts at Prabhudas Lilladher in SBI Life’s post result note.
ICICI Lombard General Insurance reported a 7.1 per cent year-on-year (YoY) rise in its net profit for the quarter ended June 2019 (Q1FY20) at Rs 309.81 crore. Analysts at Edelweiss Securities believe ICICI Lombard can grow at 20 per cent for the next 20 years, while maintaining 20 per cent return on equity (RoE). They maintain ‘buy / sector outperformer rating’ on the stock with target price of Rs 1,300.