OPEN APP
Home / Markets / Stock Markets /  This Indian metal stock sees growing interest from FIIs. Do you own?
Listen to this article

Steel Authority of India Limited (SAIL) shares have been under sell-off pressure after rising to its 52-week high of 145.90 apiece levels in first week of August 2021. However, the metal stock got severely hit once the Government of India 9GoI) imposed 15 per cent duty on export of steel and the PSU stock hit its fresh 52-week low of 63.60 per share on NSE. But, the stock has recently attracted buying interest of foreign institutional investors (FIIs) that has helped SAIL share price to sustain above its recent lows.

According to stock market experts, SAIL and other metal shares have declined in recent sessions due to sharp decline in demand and price of the metal in global merchandise. Rest of the damage was done by the GoI that imposed 15 per cent export duty on steel. but, they maintained that domestic demand is expected to return in the medium to long time frame due to factors like rising government infra spending, the revival of private CAPEX, and rising housing demand. They said that it is opportune for long term investors to start accumulating in the stock from current levels.

Highlighting upon the discounter shopping by FIIs' in SAIL shares, Sonam Srivastava, Founder at Wright Research — a SEBI registered investment advisor firm said, "Based on the latest data, the FII investment in SAIL is at 4.58 per cent. It has increased slightly from December but is lower than the data from a year ago. Citibank NA is one of the biggest foreign holders of the stock based on recent data."

Sonam Srivastava went on to add that the SAIL share price is at one year bottom in terms of price as the dumping of metal prices has started across the world amid fears of global slowdown and most notably the slump in Chinese economy, which is the biggest consumer of metals. "We have a cautious outlook towards the metals industry right now but investing should be forward looking and in the next 3-6 month horizon, we could see growth and infrastructure spending come back which could be a boost for SAIL share prices," Sonam Srivastava of Wright Research said.

On strong fundamentals that may support SAIL share price rally in medium to long term, Punit Patni, Equity Research Analyst at Swastika Investmart Ltd said, "The domestic demand is expected to return in the medium to long time frame due to factors like rising government infra spending, the revival of private CAPEX, and rising housing demand. Further, due to the curbing of steel production by China due to environmental concerns, and rising demand for green steel in developed nations (expensive to manufacture), Indian steel manufacturers are expected to gain a share in the global steel industry. Thus, long-term investors can accumulate SAIL on dips."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Recommended For You

×
Edit Profile
Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout