Top 5 Stocks in which FIIs Sequentially Raised their Stakes

Editor's note: A combination of factors has led to relentless selling by foreign institutional investors (FIIs).

As central banks tightened liquidity, the dollar became stronger. Add to that, the rising inflation across the globe and the Russia - Ukraine war, which added fuel to the fire.

Ultimately, interest rates are rising worldwide which has prompted foreign investors to pull out their investments from emerging markets such as India.

From time to time, FIIs are known to abandon emerging markets. And this tends to have a lasting effect on markets.

Where did the FII selling leave Indian markets? It was the primary reason behind the recent stock market sell-off and why Indian share markets are still falling.

So, what lies ahead? Will FIIs come back, or will they continue selling?

Before we answer that question, let's take a look at the top five Indian stocks where FIIs increased their stake sequentially.

Back in October 2021, we wrote to you about these five stocks which saw FII buying. At that time, FIIs were just getting started with their selling.

Company	CMP (Rs)	Marketcap (Rs bn)
Aavas Financiers	1,990	155
NALCO	73	134
Voltas	1,020	338
Quess Corp	592	88
HDFC Life	544	1,150

Source: Equitymaster

Where does the FII holding in these stocks stand now? And which are the new additions to this old list?

Continue reading to find out more...

5 Stocks where FIIs Sequentially Raised their Stakes

So far till October 2021, foreign institutional investors (FIIs) put in around Rs 660.2 bn in to the Indian share markets.

FIIs were net buyers in 8 out of 10 months in calendar year 2021-22.

If we are to go by historical data, FIIs have been net buyers in the last eight Octobers out of 10.

But October 2021 told a different tale.

Foreign investors were net sellers in October 2021, having pulled out Rs 38.3 bn as I write this.

They took out Rs 23.3 bn from the equities segment while the overall net outflow stood at Rs 38.3 bn during October 1-22.

Let's take a look at Indian stocks where FIIs increased their stake sequentially. Please note, the data is as on 30 September 2021.

#1 Aavas Financiers

In August 2021, two promoters of Aavas Financiers offloaded shares worth Rs 7.5 bn through open market transactions.

While promoters of the company have been offloading stake, FIIs are loading up.

The September 2021 shareholding data shows that FIIs increased their stake in the company by 7.68%.

Overall, FIIs held 39.81% stake in the company as of September 2021.

And it's not just FIIs. Even mutual funds are bullish on the stock. Mutual funds too, increased their stake to 4.45% in the quarter under review.

Shares of the company have seen a good run in the past year, rising around 84%.

As demand picks up in the real estate sector, housing finance companies like Aavas Financiers will be able to report higher earnings this festive season.

To know more, check out Aavas Financiers' latest shareholding pattern.

Update: Since we last wrote to you in October 2021, FII shareholding in the company has stayed near the same level.

In the most recent June 2022 quarter, FIIs decreased their stake to 39.03% from 39.91% in March 2022.

#2 NALCO

FIIs raised stake in National Aluminum Company (NALCO) from 8.64% in June 2021 to 15.22% in September 2021.

In fact, FIIs have increased their stake for the past four consecutive quarters now.

Ace investor Rakesh Jhunjhunwala is also a shareholder in this company. This is a fresh investment by the market veteran.

According to the shareholding pattern for September 2021, Rakesh Jhunjhunwala held 1.36% stake or 25,000,000 shares in the company.

Note that metal stocks are in focus for quite some time now as base metal prices are rising amid higher demand expectations.

Base metals have surged after European smelters became the latest casualties in a global energy crisis that's knocking supply offline and heaping pressure on manufacturers.

Owing to this, shares of the company have seen a stellar run on the bourses rallying around 240% in the past year and around 25% in the past three months alone.

Update: The latest shareholding pattern of NALCO shows that FII stake overall stands at 16.71%. In the most recent June 2022 quarter, FIIs decreased their stake by 1.3%.

Meanwhile, mutual funds added exposure to NALCO and took their overall holding to 10.11%.

#3 Voltas

Latest shareholding pattern of Voltas shows that FIIs increased their stake in the company by 5.07% in the September 2021 quarter.

Overall, the FII holding in the stocks is 22.31%.

Mutual funds are even more bullish on the stock. Their holding in the company has not gone below 21% since the past eight quarters.

Two weeks ago, the company's share price saw a spike after it announced festive season offers on air conditioners. But since then, there's been a downtrend.

From trading at Rs 1,338 on 18 October, Voltas currently trades at Rs 1,177. It has a marketcap of Rs 395.1 bn.

Still, the company has performed well in the past year, delivering 73% returns.

Voltas, with its proud Tata legacy, is India's undisputed leader in cooling products and the #1 room air conditioner (RAC) brand. The company is also an engineering solutions provider and a project specialist.

To know more, check out Voltas 2021-22 annual report analysis.

Update: Back when we wrote this article in October 2021, FII holding stood at 22.31%. Today, as of June 2022, FII holding stands at 26.2%.

FII holding was the same in the March 2022 quarter too which means FIIs neither sold nor added exposure to Voltas recently.

#4 Quess Corp

Quess Corp operates in the facility management services segment, and also deal with HR services, technology solutions, security, and cash logistics.

This is a niche segment with limited players and according to a global market research firm, the facility management services market in India is poised to grow by US$14.98 bn during 2018-2022 at a CAGR of almost 18% during the forecast period.

In the quarter under review, Quess Corp's promoters sold a part of their stake worth Rs 4.5 bn.

Meanwhile, FIIs increased their stake to 22.14% in September 2021 from 17.32% in the previous quarter.

FIIs have been consistently increasing their stake in Quess Corp for past five quarters now.

A couple of months ago, the company had announced a new dividend policy under which it would be using around 33% of its free cash flows to return to its shareholders over three years.

Over the past one year, shares of the company have delivered 129% returns.

To know more, check out Quess Corp's latest shareholding pattern.

Update: In the June 2022 quarter, FIIs bought additional shares of Quess Corp and took their overall exposure to 22% from 21.45% in the previous quarter.

#5 HDFC Life Insurance

While promoters of HDFC Life Insurance have been on a selling spree since the past 7 quarters, FIIs have increased their stake in 6 out of the past 7 quarters.

From 21.07% stake in March 2020, FIIs currently hold 30.12% stake.

In the September 2021 quarter, FIIs increased stake by 4.06% in HDFC Life.

The private life insurer reported its quarterly result last week wherein its consolidated net profit declined 16% to Rs 2.8 bn in the quarter ended September 2021.

Last month, the company announced 100% acquisition of Exide Life Insurance Company (subsidiary of Exide Industries) for a total consideration of Rs 66.8 bn. The merged entity will have a 1.4 lakh strong agent network as well as a consolidated AUM of Rs 2 tn.

Exide will bring nearly 40,000 agent advisors as well as a sizable distribution network that can help HDFC Life extend its reach in South India where Exide Life has a strong market share.

Shares of the company have had a muted run on the bourses, delivering 18% returns in the past year.

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

Update: HDFC Life Insurance share price is falling and one reason for this could be the FIIs selling their stake in the insurance major by a huge extent.

In March 2022 quarter, FIIs sold a whopping 4.1% stake in HDFC Life and took their exposure to 26.3% from 30.4%.

One of the primary reasons why HDFC group companies are falling is because FIIs have sold stakes in most of the group companies.

HDFC Bank share price is falling while HDFC AMC is also under pressure.

Other stocks where FIIs raised stake in June 2022 quarter

Here are stocks where FIIs raised their stake in the June 2022 quarter.

Company Name	FII Holding June 2022 (%)	FII Holding March 2022 (%)	Change (%)
Max Healthcare Institute Ltd.	23.34	14.59	8.75
The Karnataka Bank Ltd.	15.46	11.92	3.54
GHCL Ltd.	18.50	15.42	3.08
Varun Beverages Ltd.	23.93	21.03	2.90
Gujarat State Fertilizers & Chemicals Ltd.	26.38	23.79	2.59
Polyplex Corporation Ltd.	12.78	10.23	2.55
Ujjivan Financial Services Ltd.	30.71	28.22	2.49
Eris Lifesciences Ltd.	15.35	13.31	2.04
J Kumar Infraprojects Ltd.	8.44	6.41	2.03
Tata Elxsi Ltd.	15.17	13.15	2.02

Source: Equitymaster

Persistent selling by FIIs. Here's why...

FIIs have largely stayed on sidelines, booking profits at every opportunity they get.

Why?

There are concerns with respect to the tapering of the easy liquidity after US Fed hinted at a sooner than expected rate hike.

That's not all. There are other concerns as well including rising crude oil prices, US bond yields, and challenges to the Chinese economy.

All this has kept FIIs from substantially investing in Indian share markets.

Update: The relentless selling by FIIs has pushed the domestic currency to historic lows. The rupee has depreciated big time.

Last week, the Indian rupee briefly touched the Rs 80 mark as falling Indian markets amid unceasing FII outflows soured sentiment.

However, as things stand now, there are some signs of revival.

While FIIs continued to be sellers, the outflows in the stock segment are at a slower pace compared to the previous month.

According to data, FII outflows stood at Rs 74.3 bn between 1-15 July. The same figure was Rs 314.3 bn between 1-18 June 2022.

It remains to be seen what the FIIs will do in coming months.

Since you're interested in tracking FII activity, check out Equitymaster's powerful stock screener.

This tool keeps track of what foreign investors are buying and which stocks FIIs are selling.

Happy Investing!

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...