Last year, Indian equity markets witnessed ferocious selling by foreign institutional investors (FIIs) amid ongoing global economic concerns. FIIs have sold shares worth Rs 2.78 lakh crore in the Indian equity markets in 2022. However, despite the heavy selling by foreign investors, Indian stock markets have been able to withstand this onslaught and outperformed the major global equity markets. One of the key reasons for this outperformance of Indian equities is consistent buying by domestic institutional investors (DII). DIIs, including mutual funds, financial institutions/banks, and insurance companies bought equities worth Rs 2.77 lakh crore last year. This DII buying has absorbed the shock of FII selling.
Nowadays, DIIs are being considered better market timers than FIIs as their prudent investment strategy has made a great fortune for them despite the global equity selloff. Data available with Ace Equity showed that as many as 16 stocks, listed in the BSE, saw DIIs increasing their stake by at least 7 per cent in the last quarter. Many market watchers consider DII buying as a bullish signal for selecting a stock, and, in the past, stocks, where DII increased their stake, have really performed well and provided decent returns to the investors.
Infosys, with a quarterly increase of 11.5 per cent by DIIs in Q2FY23, has a total DII ownership of 30.04 per cent. The stock is trading at Rs 1,471 and its current market valuation is at Rs 6.15 lakh crore. It is followed by Crompton Greaves Consumer Electricals, which registered 10.8 per cent growth in the DII holdings in the September quarter, amounting to 43.4 per cent total foreign investor stake in the consumer durables. Crompton Greaves shares are trading at Rs 336.5 apiece and its m-cap is Rs 21,398 crore. Care Ratings is in the third spot with a 10.6 per cent DII increase in Q2, taking total DII ownership of 21.2 per cent. It has a market cap of Rs 1,880 crore with the stock trading at Rs 633.
The fourth place is occupied by Dixon Technologies, which has recorded a 10.4 per cent surge in DII ownership in Q2, thus taking DIIs’ total stake to 17.6 per cent. The consumer electronics MNC has a market valuation of Rs 22,062 crore and the stock is currently trading at Rs 3,704. By registering a 10.3 per cent increase in DII holdings in Q2, UTI Asset Management Company is ranked fifth in the list. It has 59.2 per cent DII ownership and its current market capitalisation is Rs 10,385 crore with the stock trading at Rs 818.
HDFC Asset Management Company is in sixth spot with DIIs raising their stake by 10.2 per cent in the previous quarter, thus taking their total stake to 12.3 per cent and HDFC AMC has a market valuation of Rs 45,712 crore. It is followed by Rolex Rings, as this automobile bearings manufacturing company has attracted 10.2 per cent DII ownership during the September quarter. At number eight is Indiabulls Housing Finance, with an increase of 10.1 per cent in Q2, taking its total DII holdings to 11.1 per cent. Indiabulls Housing Finance has an m-cap of Rs 6,610 crore.
Sona BLW Precision Forgings is in ninth place with a 9.5 per cent increase in domestic institutional investors’ ownership during Q2, which has reached a total of 23.9 per cent. Its current market valuation is Rs 24,986 crore. Kirloskar Pneumatic Company is in the tenth spot with 8.5 per cent increase in DII stake in Q2, while total holding is now 27.3 per cent. The current m-cap of Kirloskar Pneumatic is Rs 3,461 crore.
Some other major stocks witnessing significant DII interest are Indian Oil Corporation, whose total DII holding is 11.1 per cent, including an 8 per cent increase in Q2 FY23. PVR Ltd’s DII ownership increased by 8 per cent in the past quarter, taking the total DII stake to 26 per cent. DIIs also raised their stake in Reliance Naval and Engineering by 7.9 per cent in Q2, which had no DII holdings earlier.
Mining major Vedanta’s saw DII holdings surge 7.7 per cent in Q2FY23, taking the total DII stake to 10.4 per cent. In HDFC Bank, DIIs increased their stake by 7.2 per cent in the September quarter, taking total DII stake to 26 per cent and Balkrishna Industries’ DII ownership increased by 7 per cent in Q2, taking total DII ownership to 18.2 per cent.
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