These midcaps saw brisk buying by FPIs in Sept quarter even when stocks rally slowed

NEW DELHI: Foreign portfolio investors (FPIs) raised their stakes by over 100 basis points in at least two dozen midcap and smallcap stocks during the September quarter, initial data available for 206 BSE500 stocks showed.
They lapped up the Rs 10,600 crore worth of Bandhan Bank shares, which promoter firm Bandhan Financial Holdings sold to meet RBI’s promoter shareholding norms.

At the end of the September quarter, FPI stake in the lender stood at 32.24 per cent, up 17.73 percentage points against 14.51 per cent at the end of the June quarter. BlackRock, Singapore’s GIC and Temasek Holdings were among the buyers.

FPIs also hiked their stake in Indiamart Intermesh by 652 basis points to 21.67 per cent from 15.15 per cent sequentially. The B2B e-commerce company posted a two-fold jump in consolidated profit at Rs 76.4 crore for the June quarter. The FPI buying probably helped the 115 per cent rally in the stock during the quarter.

GMM Pfaudler, whose shares were sold at 33 per cent discount by the promoters in an offer for sale (OFS) during the quarter, also saw good FPI interest. FPI holding in the company was less than 1 per cent (at 0.87 per cent) at the end of June quarter. It rose by 574 basis points sequentially to 6.61 per cent at the end of the September quarter.

Laurus Labs, whose shares soared 212 per cent, or nearly three times, during the September quarter, saw FPIs hike stake to 20.74 per cent from 16.06 per cent sequentially. The drug maker reported over 11 times jump in June quarter profit at Rs 172 crore compared with Rs 15 crore reported for the same quarter last year. Revenues grew 77 per cent to Rs 974 crore.

FPI flows to domestic equities were negative in September, but the July-September quarter net flow stood at Rs 46,860 crore compared with a Rs 29,517 crore that came in during the June quarter.

Elara Capital said cumulative foreign flows since the March market correction have been strong, which was in line with the expectations of emerging markets benefitting from the surplus liquidity environment prevailing in global markets.

“Within emerging markets, India being non-exports dependent will attract higher flows in a globally growth-challenged environment. We expect stronger foreign flows into the India market in the near term,” it said.

For the quarter, the BSE Smallcap index climbed 14.17 per cent and the BSE Midcap index 12.63 per cent, compared with a 9 per cent rise in the 30-pack Sensex.

FPI holding in Aavas Financiers rose by 348 basis points to 27.95 per cent at the end of the September quarter from 24.47 per cent at the end of the June quarter. FPI holding jumped from 22.95 per cent to 26.31 per cent in Granules India, from 5.71 per cent to 8.95 per cent in Emami, from 13.81 per cent to 16.37 per cent in TCNS Clothing, from 19.95 per cent to 22.42 per cent in Dr Lal Pathlabs and from 20.86 per cent to 23.13 per cent in Trent.

Rallis India, Max Financial Services, Bharat Electronics, Mindtree, Syngene International, Larsen & Toubro Infotech, Inox Leisure, Deepak Nitrite, Apollo Hospitals Enterprise were other stocks where FPI holdings rose by over 100 basis during the 90-day period.

“During the quarter, the market performance was aided by strong foreign inflows, enabled likely by weakness in the dollar. With the US elections up ahead, dollar movement and election outcome-related uncertainty are going to be the key things to watch,” Citi Research said last week.

Credit: Stocks-Markets-Economic Times

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