Check out the 10 large caps where FIIs increased stake the most

Indian stock indices, which have scaled new highs and are now consolidating near their peak levels, have seen a rush of money towards large cap counters as investors—anticipating a correction from these levels—are looking at some comfort factor rather than high-beta mid- and small-cap stocks.

Foreign portfolio investors (FPIs) and foreign institutional investors (FIIs) have become more cautious about investing in India but looking at their behaviour it seems they have been bullish about large caps for the last few months.

Quarterly shareholding data shows they pushed up their holding in as many as 83 listed companies that have a valuation of $1 billion or more.

In particular, they have been bullish on the software services segment, besides pharmaceuticals, private banks, power utility, oil, fast-moving consumer goods, steel and engineering.

Top large cap favourites among FIIs

FIIs picked up additional stakes in India’s second- and third-largest software services exporters—Infosys and Wipro. These two stocks have already outperformed bigger peer Tata Consultancy Services over the past year, thanks at least partly to the FIIs’ bullish stance on these stocks.

Offshore investors also bought an additional stake in Axis Bank, the third-largest private-sector lender in the country; drugmaker Divi’s Labs; engineering giant Larsen & Toubro; Aditya Vikram Birla group flagship Grasim; FMCG firm Dabur and Tata Steel. 

Two state-owned firms also found favour, with power generation company NTPC and the country’s top oil marketer Indian Oil also seeing buying from FIIs during the quarter ended June 30.

Billion-dollar stocks where FIIs made a bet

Meanwhile, FIIs picked up an additional stake of 2% or more in more than a dozen companies last quarter.
Technology firm Coforge, which was previously known as NIIT Technologies and went through a rebranding exercise last year, reported the most bullish stance by offshore institutional buyers. They purchased a 4.8% additional stake in the company last quarter.

In particular, FIIs were among the buyers in the banking, financial services and insurance space with three out of the top ten stocks where they bought 2.5% or more additional stake falling in the sector. These include SBI Cards, IDFC First Bank and Max Financial, which houses Max Life Insurance.

The offshore buyers were also attracted to the commodity space, bulking up their holding in Tata Steel, chemical manufacturer Aarti Industries and Graphite India.

Engineering was another theme for FIIs last quarter as they bought in Voltas, a Tata group firm that has engineering as well as a consumer durable business, and state-run Bharat Electronics.