Midcap Stocks Bought by DIIs and FIIs

Institutional activity in Indian equities remained strong during the December 2025 quarter, with foreign investors becoming selective buyers and domestic investors remaining supportive.

This quarter, simultaneous purchases by DIIs and FIIs in a few midcap stocks were a noteworthy trend that indicated growing institutional confidence.

Strong fundamentals and long-term business visibility are frequently indicated by this unusual alignment between domestic and foreign investors.

Early in the growth cycle, institutional are drawn to midcap stocks. Here we highlight 3 mid-cap stocks in this editorial that both FIIs and DIIs were interested in purchasing during the quarter.

Which Midcap Stocks Are FIIs and DIIs Buying?

#1 RBL Bank

First on the list is RBL Bank.

RBL Bank is a private sector bank in India with a diversified presence across retail, wholesale and commercial banking.

The bank offers a wide range of financial services, including retail banking, corporate and commercial banking, credit cards, microfinance, and treasury operations, with an increasing emphasis on secured and branch-based lending.

FIIs grew their position to 21.91% in the December quarter, up from 15.49% in the September quarter. DIIs grew their ownership to 39.69%, up from 35.28% at the same time.

Source: Equitymaster

During Q2 FY26, RBL Bank reported consistent increase in advances, which exceeded Rs 1 trillion (tn), owing to strong traction in its wholesale banking and secured retail portfolio.

Secured items such as company loans, gold loans, tractor financing, and mortgages remained the leading retail advances. Unsecured retail exposure was gradually lowered in order to improve portfolio quality.

On the liability side, granular deposits less than Rs 30 million (m) represented for more than 51% of total deposits, demonstrating the bank's sustained commitment on developing a solid and low-cost deposit franchise.

Asset quality remained broadly stable during the quarter, with net slippages close to nil in wholesale and secured retail portfolios, while stress in specific credit card vintages remained a concern.

RBL Bank announced a strategic investment in October 2025 from Emirates NBD, the UAE's second-largest bank, which will buy a 60% ownership in the bank through a preferential issue, subject to regulatory and shareholder approvals.

Following the transaction, Emirates NBD's Indian businesses would be amalgamated with RBL Bank, with the capital infusion projected to boost the bank's net worth to roughly Rs 420-440 bn.

The cooperation is anticipated to help RBL Bank grow its present operations, improve its technology and digital capabilities, and open up new prospects in cross-border trade, NRI banking, and corporate connections.

For more details, see the RBL Bank company fact sheet and quarterly results.

#2 Mphasis

Next on the list is Mphasis.

Mphasis provides a broad range of IT services, such as next-generation digital and cloud solutions, infrastructure services, business process services, and application development and maintenance.

The company mainly serves clients in the areas of banking and financial services, insurance (BFSI), technology, media and telecom, logistics, and healthcare.

Its business is increasingly driven by AI-led transformation, cloud modernisation, data engineering, and integrated build-and-run services models, supported by its proprietary platforms and tools.

Throughout the quarter, FIIs and DIIs increased their investments in Mphasis, demonstrating their growing confidence in the company's strong large-deal momentum and growing growth visibility.

Source: Equitymaster

In Q2 FY26, Mphasis's revenue grew by 12.39% YoY. Total contract value (TCV) wins remained high throughout the quarter thanks to solid deal wins of US$ 528 m and the ongoing ramp-up of previous major contracts.

Growth was dominated by the BFSI and TMT verticals, but non-BFS industries also showed significant growth, indicating diversification outside the core BFS portfolio.

Mphasis also launched its unified AI platform during the quarter, aimed at helping enterprises modernise core systems, improve productivity, and drive long-term cost efficiencies.

Going forward, the company remains focused on converting its strong deal pipeline into revenue, scaling AI-led engagements, and maintaining operating margins within its guide range, supported by sustained large deal execution and improving client mining.

For more details, see the Mphasis company fact sheet and quarterly results.

#3 Sagility

Last on the list is Sagility.

With a primary focus on the US healthcare industry, Sagility offers a range of healthcare-related services, such as payer and provider operations, revenue cycle management, claim processing, care management, member engagement, and healthcare analytics.

By combining domain expertise, technology, and AI-based solutions, the company helps health insurers and healthcare providers manage complex operations, reduce costs, and improve outcomes.

About 90% of its revenue comes from the Payer sector, which drives the company's operations. However, the Provider segment is always evolving due to the growing need for digital transformation and operational efficiency.

For the December 2025 quarter, the company has seen an increase in DIIs and FIIs holding.

Source: Equitymaster

Sagility reported significant revenue growth during the quarter, bolstered by a continuous increase in previously acquired contracts as well as ongoing traction in both the Payer and Provider categories.

Efficiency gains, the advantages of scale, and the growing application of technology and AI in delivery operations all contributed to the strong operating performance and good EBITDA margins.

With numerous active use cases implemented across clients, the business continues to see high demand for its AI-led transformation products. These solutions are assisting providers and payers in modernizing key healthcare procedures, cutting costs, and increasing productivity.

It also benefited from seasonal momentum leading up to the annual enrolment period, which usually supports more activity in the second half of the year, especially for payer clients.

The company's goals are to maintain organic growth and increase wallet share with customers. With strong client relationships and a robust US healthcare demand environment, it also seeks to scale AI-enabled solutions while keeping margins within the recommended range.

For more details, the Sagility company fact sheet and quarterly results.

Conclusion

Rising interest by domestic and foreign institutional investors in these companies demonstrates more confidence in their underlying business strength, execution capability, and medium-term growth forecast, while it does not ensure future profits.

While every company operates in a different industry, they all have favourable elements such as improved fundamentals, better growth visibility, and a more defined strategic approach, even if short-term volatility remains a possibility.

Investors should consider earnings quality, balance sheet health, sector positioning, and competitive advantages before depending entirely on institutional buying activity.

Before making any investment decision, it's critical to do a thorough evaluation of fundamentals, management quality, and valuations.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...