Axis Bank, HDFC Bank, Bajaj Finance, and Cholamandalam Investment and Finance were the stocks that FIIs bought the highest in the financial services space in the December quarter, data by Prime Database showed.
These four stocks saw net buying to the tune of Rs 15,981 crore in the last quarter.
The value has been calculated by multiplying the difference in the September and December shareholding by the average closing price of the stocks during the quarter.
Axis Bank topped the list as FIIs net bought shares worth Rs 5,549 crore. FII holding in the private sector lender increased by 5.33 crore shares sequentially in the December quarter. Shares of the private sector lender gained more than 6% in the quarter.
HDFC Bank, which is more than 50% owned by FIIs, also saw buying to the tune of Rs 2,585 crore. FII holding in the country’s largest private sector lender increased by 1.66 crore shares sequentially. The stock net gained 12% in the last quarter.Cholamandalam Investment saw buying worth Rs 3,636 crore by FIIs, whose holding increased by 3.08 crore shares in the last quarter. This stock net gained over 3% in the three months to December.The fourth stock bought by FIIs was Bajaj Finance, which saw net investment of Rs 4,211 crore. FII holding in the non-bank financial major increased by 0.56 crore shares.
Bajaj Finance was the only stock in the BFSI space which was bought by both FIIs and mutual funds in the last quarter. Mutual funds bought shares worth Rs 4,236 crore and their cumulative holding increased by 0.56 crore shares.
Besides Bajaj Finance, the other stocks bought by MFs in the sector were ICICI Bank, Kotak Mahindra Bank and Indian Bank.
ICICI Bank was the second highest bought stock by MFs in value terms in the December quarter at Rs 5,754 crore. In absolute terms, MF holding in the private sector lender increased by 6 crore shares. The stock gave nearly 5% returns in the third quarter of the financial year.
In Kotak Mahindra Bank, MFs net bought stocks worth Rs 4,500 crore, and it was the third highest bought stock by them in value terms. Their cumulative holding went up by 2.53 crore shares in absolute terms. The stock was one of the best performing in the banking space, as it gave about 10% returns to investors in the three-month period.
In the public sector space, Indian Bank caught the interest of mutual funds, who net bought stocks worth Rs 1,780 crore. In absolute terms, they bought 4.21 crore shares of the lender. In fact, MFs have increased their holding in the PSU stock for two straight quarters, and they owned a 10.5% stake in the lender as of December end, according to Trendlyne.
Will the trend continue?
After the strong buying in the December quarter, FIIs turned net sellers of stocks in January and have remained so, so far in February.
In fact, FPIs sold stocks worth over Rs 30,000 crore only in the BFSI sector last month, according to the NSDL data. A significant part of this selling was in private banks, particularly HDFC Bank.
Also Read | Rs 40,000-crore blow! FPIs dumped stocks from 7 sectors in January, but one bore the brunt of it
However, Sanjiv Bhasin of IIFL Securities is recommending taking a contra bet on largecap private banks on attractive price-to-book value.
“The dumb money is now selling the largecap private banks, which were the most sought after and getting into PSUs. So, it is time to be contrarian. I think private banks are in a very sweet spot. Two and a half times the price to book you will not get HDFC Bank maybe in a lifetime,” Bhasin said.
Though FIIs have turned net sellers in the current quarter, experts see the pace slowing down amid easing bond yields and a stable dollar.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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