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Foreign institutional investors (FIIs) have been largely bullish on India for quite some time now.

India was the only major emerging market to receive foreign inflows in 2020. In 2021 so far, it’s second only to Brazil.

Foreign portfolio investors (FPIs) held $595 bn worth of domestic equities as of June 2021.

Let us take a look at Indian stocks which have the highest FII shareholding. Please note, the data is as on 30 June 2021.

#1 HDFC (72.2%)

It’s no surprise that Housing Development Finance Corp (HDFC) tops the list of companies with highest FII exposure. As of June 2021, FII shareholding in HDFC stands at 72.2%.

Its global investors include Government of Singapore, Invesco Oppenheimer, T Rowe Price, Government Pension Fund Global, Societe Generale, Australian Super Pension Fund, First State Investments, and Morgan Stanley.

HDFC has emerged as one of the most-liked stocks of foreign investors.

It’s the first listed Indian company among the BSE Sensex companies to have over 75% shareholding by FIIs. Back in September 2014, overseas investors had raised their stake to a record high of nearly 78%.

In May 2012, HDFC’s board had approved raising the FII limit in the company to 100%.

Later in 2020, because the People’s Bank of China was raising its stake, the central government revised the FDI policy, which will now require a clearance from the centre.

The bullishness by foreign investors can be attributed to the kind of returns given by HDFC.

To know more, check out HDFC’s latest shareholding pattern.

#2 Shriram Transport (59.6%)

The second company in this list is Shriram Transport with 59.6% FII exposure as of June 2021.

Fidelity Investment Trust, Government Pension Fund Global, J P Morgan Funds, Vanguard International, and T Rowe Price are among its foreign investors.

In 2015, the Reserve Bank of India (RBI) had allowed FIIs/RFPIs to invest up to 74% of the paid up capital of Shriram Transport.

Back in June 2021, the non-banking finance company had raised 20 bn through qualified institutional placement (QIP) issue via foreign and domestic investors.

#3 Zee Entertainment (57.5%)

Now this may come as a surprise but FIIs have 57.5% stake in Zee Entertainment as of June 2021.

Investors in ZEE include OFI Global Fund China, Vanguard International, Invesco Oppenheimer, and Amansa Holdings among others.

Foreign investors have trimmed their stake from 64.2% in March 2021 to 57.5% in June 2021. This won’t come as a surprise as the company’s stock performance has been dull. When markets are scaling fresh peaks, Zee Entertainment trades near 52-week low levels.

Over the past year, Zee Entertainment shares have eroded shareholders’ wealth by 20%.

#4 Apollo Hospitals (53.2%)

Foreign investors seem bullish on Apollo Hospital Enterprises as they have increased their holding from 47.73% as of September 2019 to 53.23% in June 2021.

Touchstone Capital, Veritas Asian, ACM Global, and Mauritius Investment are among the top foreign investors in Apollo Hospitals.

Foreign investors would be sitting on handsome gains as the stock movement for Apollo Hospitals has been an upward rising graph, with gains of 180% in the past year.

Shares of the company continue to trade near record high due to the re-organisation of its pharmacy and digital platform 24/7, and vaccination opportunities.

#5 Axis Bank (52.5%)

Here’s another company from the financial sector where foreign investors hold over 50% stake.

Vanguard, Oakmark, Government Pension, Government of Singapore, and Abu Dhabi Investments are among Axis Bank’s foreign investors.

Private sector lenders are among the major gainers of the record foreign fund flow into the Indian equity markets during the current financial year.

#6 IndusInd Bank (52.1%)

FII exposure in IndusInd Bank stands at 52.1% of the total equity as of June 2021.

Morgan Stanley, Goldman Sachs, Government Pension Fund Global, BofA Securities Europe, and BNP Paribas are among the global investors.

Last year, IndusInd Bank along with HDFC Bank was put in the red flag list, a system used for monitoring foreign portfolio investor (FPI) limits.

A listed company enters the list when the available legroom for overseas investment is less than 3% of the permissible limit.

Once a stock enters this list, incremental FPI buying is permitted on condition that overseas investors will divest their excess holdings within five trading days from the day of breach.

FPIs can invest up to 74% in both HDFC Bank and IndusInd Bank.

#7 ICICI Bank (48%)

Another private lender ICICI Bank has 48% of its total equity exposed to foreign investors as of June 2021.

Dodge & Cox International, Government of Singapore, Europacific Growth Fund are among ICICI Bank’s foreign investors.

Along with FIIs, ICICI Bank is also a favorite of mutual funds. Most of the top Indian mutual funds have ICICI Bank in their portfolio.

The stock currently trades just 1% below its all-time high. Over the past year, ICICI Bank shares are up 78%.

FIIs also bullish on these stocks

Apart from the above, here are other stocks where foreign investors hold significant stake.

Source: Equitymaster
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Source: Equitymaster

FII activity

Foreign institutional shareholding in India’s biggest listed companies reduced slightly in the June 2021 quarter. FII holdings in the Nifty 500 companies was down 60 basis points.

Coming to recent data, foreign investors were seen buying shares worth 20.9 bn between 1 August and 15 August after selling 64.1 bn worth shares during the 16-31 July period.

Foreign investors primarily invest in attractively valued companies in developed and emerging markets.

Now that there’s an ongoing tension about ‘taper’ which could affect several of these FII favorite stocks, they are loading up on defensive stocks from IT, utilities, and pharma sector.

Fortnightly data available showed that foreign investors loaded defensive stocks as they dumped high-beta stocks from the metals & mining, NBFCs, and auto sectors.

Whenever the Fed talks about tapering, markets see volatility.

Foreign portfolio investors (FPIs) held US$595 bn worth of domestic equities as of June 2021, of which major holdings were in financials (34.5%), IT (14.3%), and energy (13.6%) sectors, as per a report.

This article is syndicated from Equitymaster.com

 

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