Are NBFCs the new FII favourite?

Foreign institutional investors (FII) holding in the National Stock Exchange-listed companies has increased to 20.09% at Rs 20.13 lakh crore in the June quarter 2016, said Pranave Haldea, Managing Director of Prime Database. 

This was led on the back of net inflows of Rs 14,671 crore in the given quarter. 

Non-banking financial companies took the majority of FII money in Q1FY17, with holdings in Housing Development Finance Corp reaching 76.86%, followed by Bharat Financial Inclusion at 63%, Indiabulls Housing Finance at 58.65% and Shriram Transport Finance  at 50.1%. 

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Also, Tata Motors (DVR) (57.15), S.E.Power (56.95), KPIT Technologies (51.43) ), Housing Development & Infrastructure (48.21), Zee Entertainment Enterprises (48.12) and UPL (47.16) were also involved in the top 10 list of companies holding FII. 

FII holding in absolute value terms were, Housing Development Finance Corp out-performing with Rs.1.52 lakh crore, which was followed by Vishal Sikka's Infosys Rs 1.09 lakh crore, HDFC Bank (Rs 0.96 lakh crore) and Tata Consultancy Services (Rs 0.85 lakh crore). 

Other noticeable companies in regards to absolute value terms were Reliance Industries (Rs 0.62 lakh) crore), ITC (Rs 0.61 lakh crore)Axis Bank (Rs 0.56 lakh crore), ICICI Bank (Rs 0.55 lakh crore), Kotak Mahindra Bank (Rs 0.5 lakh crore) and Sun Pharmaceutical Industries (Rs 0.45 lakh crore).

In last one year, the highest increase in FII holdings were in S.E.POWER which rose by 39.13% from its 17.82% in June 2015. This was followed by Prozone Intu Properties which saw an increase of 27.06% to 36.98% in Q1FY17, from 9.92% holdings in June. 

Bajaj Telefilms saw a robust growth of 21.37% versus just  0.19% in the corresponding period of the previous year. 

Where some companies were favoured by foreign investors, there were some companies which lost their essence in foreign investments. 

LIC Housing Finance dropped to 11.64% from 36.90% in June 2015. IIFL holding which recorded 42.74% in June 2015, now stood at 26.83%, a decline of 15.91%. Monnet Ispat & Energy fell to 6.40% and Tribhovandas Bhimji Zaveri at 3.29% (a drop of 13.01% from previous year).  

In comparison on quarter-on-quarter, Container Corp of India rose to 28.44% from 7.86%, with Diamond Power Infrastructure (15.23%), Kolte-Patil Developers (11.80%), Britannia Industries (18.07%)  and UPL (47.16%). 

Chromatic India and LT Foods decreased to zero FII holding from their previous March quarter of 31.38% and 14.16% respectively. 

On an overall basis, FII holdings went up in 437 companies listed at NSE in the last 1 year with the average stock price return of these companies in the same period being a huge 37 per cent. On the other hand, FII holding went down in 577 companies listed at NSE. 

Average stock price return of these companies in the same period was 18.32%.

The top three FIIs which hold the largest positions in Indian stocks by value as on 30th June 2016 were Europacific Growth fund investing around Rs 51,564 crore, Government of Singapore at Rs 41,085 crore and Oppenheimer at Rs 27073 crore.