Foreign portfolio investors or REITs have been selling Indian stocks aggressively, with the current month already seeing net sales of over $3.7 billion. This is due to over $5 billion in net sales during the last quarter of the previous calendar year.
The three-month period between October and December 2021 also saw REITs reduce their stake in a majority of Nifty and Nifty 500 companies, according to a latest report from Motilal Oswal Financial Services.
In the Nifty 50 universe, which includes 50 of the largest listed companies by market capitalization, foreign investors have reduced their stake in nearly three-quarters of the segment, or 74% of the total number of companies in the index.
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Axis Bank, Indusind Bank, Hero Motocorp, ICICI Bank, Grasim Industries, HCL Technologies, Divi’s Labs, Tata Steel, Bajaj Auto and JSW Steel are the top stocks that saw a decline of more than 1% in REIT holdings compared to in the previous quarter, the report said.
In the broader Nifty 500 Index, the quantum of FPI participation fell to a six-quarter low of 20.9% as of December 31, 2021. In the Nifty 500 Index, 53% of companies saw FPI participation decline in the December quarter.
Interestingly, domestic institutional investors or DIIs increased their stake in exactly the same number of companies – 53% – in the Nifty 500 universe. against the tide during the December quarter by increasing their stake in 70% of the companies.
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Among sectors – in the Nifty 500 universe, REITs hold the largest stake in Private Banks (46.1%), followed by NBFCs (29.7%), Insurance (22.9%), Oil and gas (22.6%) and technology (19.8%), while DIIs hold the largest stake in private banks (23%), followed by capital goods (20.5%) , PSU Banks (17.9%), Consumer Durables (16.9%) and Metals (16.7%). percent).
Incidentally, REIT ownership in BFSI – private banks, NBFCs, insurance and PSU banks – fell for the fourth straight quarter to 35% in the December quarter, which is also the lowest in 20 quarters.
Meanwhile, DII’s holdings of Nifty shares rose the most in IOCL, Axis Bank, Hero Motocorp, ICICI Bank, Divi’s Labs, HCL Technologies, Indusind Bank and Eicher Motors, according to the report.