3 Smallcap Stocks Sold by FIIs in June 2026 Quarter

The last few quarters for the Indian stock markets have been characterised by huge selling by Foreign Institutional Investors (FIIs). It's therefore not surprising to see FIIs having sold stake in several smallcap names as well.

This does not necessarily mean that the fundamentals of some companies, or of Indian companies, have deteriorated. It's just that FII money has moved out due to various reasons, including to other markets.

That having been clarified, here are a few stocks where FIIs have trimmed their stake in the quarter ending 30 June 2026.

#1 Transformers and Rectifiers

First on the list is the stock of Transformers and Rectifiers.

Transformers and Rectifiers (TARIL) is one of India's leading manufacturers of power, distribution, and furnace transformers. The company serves utilities, renewable energy projects, railways and industrial customers in India and overseas.

FII Holdings June 2026 quarter vis-a-vis March 2026 quarter

Source: Trendlyne

FIIs have trimmed their stake in the company from 8.3% in the March 2026 quarter to 7.8% in the June 2026 quarter.

On the financial front, for the first quarter of FY27, TARIL reported revenue from operations of Rs 5,723.4 million (m), compared with Rs 5,290 m in the corresponding quarter of the previous year, registering an 8% year-on-year growth.

EBITDA stood at Rs 1096 m, while EBITDA margin was 19.16%. Profit After Tax (PAT) for the quarter stood at Rs 643.4 m, dropping marginally from Rs 674.6 m.

According to the company, the operational momentum remained robust, with order inflows increasing 218% year-on-year to Rs 21.14 billion (bn) during the quarter.

As of June 30, 2026, the Company's unexecuted order book reached a record Rs 66.30 bn, representing a 26% year-on-year increase and providing healthy revenue visibility over the coming quarters.

The Company continues to make steady progress on its strategic growth initiatives. Expansion of the Changodar manufacturing facility with an investment of approximately Rs 1,500 m, backward integration projects worth Rs 9-10 bn, and the development of three greenfield manufacturing facilities at Chiyada are progressing as planned.

These initiatives will strengthen TARIL's manufacturing capabilities, enhance operational efficiencies and support future growth.

To know more, check the TARIL fact sheet and latest quarterly results.

#2 Ather Energy

Next on our list is Ather Energy.

The company is an Indian electric vehicle company that designs and manufactures smart electric scooters. Founded in 2013 by Tarun Mehta and Swapnil Jain, the company is headquartered in Bengaluru, Karnataka and focuses on connected, software-driven electric mobility.

FII Holdings June 2026 quarter vis-a-vis March 2026 quarter

Source: Trendlyne

FIIs have trimmed their stake in Ather by 100 basis points, now holding a 16.2% stake as of the end of June 2026.

Moving ahead, to scale up, the company is expanding big with its Factory 3.0 in Chhatrapati Sambhajinagar. This is the largest factory to date, initially planned for a total capacity of 1 m, with 0.5 m going live in Phase 1 itself.

The company expects Phase 1 to commence by the end of this calendar year, Q3 FY27.

This plant, in addition to driving the bulk of the company's growth in the coming quarters, will improve unit economics by enabling greater vertical integration than Ather has today, with battery pack assembly, transmission assembly, painting, electronics assembly, and CED coating all coming in-house.

On the financial front, the company reported revenues of Rs 11,747 m for Q4FY26 vs Rs 6,761 m YoY. The net loss dropped to Rs -1,002 m vs Rs -2,344 m YoY.

To know more, check the Ather Energy fact sheet and latest quarterly results.

#3 City Union Bank

Next on our list is City Union Bank.

City Union Bank is a bank especially known for its strong presence in South India and its focus on serving retail customers, small businesses, traders, and MSMEs.

FII Holdings June 2026 quarter vis-a-vis March 2026 quarter

Source: Trendlyne

FIIs sold large quantity of shares in City Union Bank in the June 2026 quarter. A fall of 4.7% is a significant stake reduction.

On the financial front, the bank registered about 26% advance growth in Q4 FY26 to Rs 666.98 bn from Rs 530.66 bn in the same period last year.

Deposit growth matched that of credit growth. The deposits grew 23% and stood at Rs 783.08 bn for Q4 financial year '26 as compared to Rs 635.26 bn in Q4 in the financial year '25

Moving ahead, management says that, in line with the FY27 vision, advances should be 2% to 3% above the industry's credit growth.

However, the bank's focus on MSME will remain. Gold loans and secured retail will be an additional enhancer.

To know more check the City Union Bank fact sheet and latest quarterly results.

Conclusion

A decline in FII ownership over a quarter should not be viewed in isolation.

Foreign institutional investors often rebalance portfolios due to global risk appetite, currency movements, redemptions, sector rotation, or country allocation changes rather than company-specific concerns.

A stake reduction may also result from dilution following fresh equity issuance or profit booking after a strong rally.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Happy Investing

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