FIIs sell aggressively: Analysing the performance of Top 10 stocks with significant holdings

Foreign Institutional Investors (FIIs) have long been a cornerstone of India’s financial landscape, injecting both liquidity and volatility into the markets. Their presence is undeniable, often evoking a spectrum of reactions from market participants, ranging from admiration to frustration. While some applaud their role in boosting market activity and capital inflows, others express concerns about their influence on market dynamics and susceptibility to sudden withdrawals. India was among the hardest hit after the ‘tapering talk’ i.e. the possibility of the Fed tapering which meant the Fed gradually reduced the pace of its bond purchases.

The FIIs have become once again the talk of the town. They have been on a selling spree and as per the data the FIIs have sold close to ₹29,500 crore in May so far.

Going forward, the two catalysts commanding attention could influence not only flows of FIIs but also the market trend from here on:

1. Market participants will be most interested in Fed Chair Powell’s speech on Tuesday, May 14th as this is likely to give fresh clues about the path ahead for interest rates.

2. Furthermore, market participants will also be eagerly awaiting key US inflation data set for release on Wednesday, May 15, 2024, and this will provide fresh insights into whether consumer inflation is easing or sticky.

The outcome of these events would have an impact on the US Treasury yields and the hardening of US bond yields has been one of the reasons for aggressive selling by the FIIs in May.

Now, let’s examine stocks where FIIs hold a significant stake. To streamline our approach, we’ve applied filters: the latest quarter's holding (i.e. quarter ended March 31, 2024) is greater than average FIIs holding over the past years. We’ve excluded NBFCs and Banking stocks for a broad-based approach.

From the above table, we can see that the majority of the stocks have felt the burn of FIIs’ selling spree. The share price of Coforge and Intellect Design has seen a drastic fall of 21.7% and 13.23%, respectively, in just the last month. HDFC Life Insurance has fallen more than 11% in a month, Mahanagar Gas as well dipped more than 10%, followed by Sona BLW Precision and Sapphire Foods India.

On the flipside, Computer Age Management Services (CAMS) has posted a gain of 5% in a month. Overall revenue increased by 25% in Q4FY24 and operating EBITDA reached 46.1%, the highest in the last 2 years. AUM grew significantly by 33% YoY. CAMS board recommended a dividend of ₹16.5 per equity share.