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Foreign portfolio investors holding in domestic equities hit a multi-year low of 17 per cent at the end of December 2022, says a study by ICICI Securities. However, they have increased their holding by 50 basis points to 22.9 per cent, thanks to their buying in stocks such as Axis Bank, Hindalco, L&T, HCL Tech, HUL and Infosys.
Among other key indices, FPI holdings dipped 20 bps for the NIFTY Next 50 index to reach 13.4 per cent during Q3 FY23 while they nudged up 40 bps for the Nifty Midcap and Nifty Smallcap index to reach 14.2 per cent and 12.9 per cent, respectively, it furter said.
Also read: FPIs increase stake in small and midcap banks
On an aggregate basis, the FPI holding of Indian stocks stands at ₹47.9 lakh crore as on January 15, which is 17 per cent of the aggregate market cap of the listed space in India. “FPI holding of Indian stocks hit a multi-year low of around 17 per cent in Jun’22 and have since hovered around that mark, which could be a sign of a bottom formation in terms of their holdings,” it observed.
Between January 1 and 15, the top five sectors which witnessed FPIs outflows were financials (₹5,700 crore), IT (₹3,500 crore), energy (₹2,800 crore), discretionary consumption (₹2,500 crore) and telecom (₹1,800 crore).
On other hand, inflows were observed in metals (₹2,500 crore) and other industrials to some extent.
“Outlook for FPI flows towards EMs in general and India, in particular, remains conducive given relatively higher growth and rising probability of an end to the aggressive QT cycle. However, relatively higher valuations compared to other EMs is a key constraint,” it said.
However, DII flows continue to be positive with MF flows towards most sectors being positive for Dec’22 except for Insurance and Industrials. SIP inflows into MF schemes continue to nudge higher and are now sustaining at a monthly run-rate of over ₹13,000 crore.
Also read: India Inc may step up rupee-denominated green bond issuances in FY24
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