Foreign institutional investors (FIIs) have sold heavy selling in large-cap companies in India in the last quarter of FY 2024-25.
The fact is that they have cleverly reduced their stake in blue chip companies, and have increased their stake in public sector companies (PSUs) and microcap companies. While retail investors are already known for earning profit by purchasing in micro-cap stocks, now the disclosure of the shareholding pattern of companies indicates that FII has also adopted this strategy.
So far, 79 listed PSU companies have announced their shareholding pattern for the quarter ended March 31, 2025. According to the information received from this, FII has increased its stake in 52 per cent companies, while in 48 per cent they have reduced it. Similarly, 186 companies in the Nifty MicroP index have so far revealed their shareholding pattern, out of which FIIs have increased their stake in 51 percent of the companies. In comparison, the FII has increased its stake in 42% of companies involved in the BSE Midcap index, which has revealed its pattern, while this percentage is 43% in the case of companies involved in the BSE midcap index. Out of the companies included in the Nifty 50 index, 20 companies have revealed their shareholding pattern so far, out of which the companies in which FIIs have increased their stake are only 25 percent (only five companies in number of number) and in terms of Nifty 100 index, it is 27 percent. Of the total 100 companies included in the Nifty 100, 73 companies have announced their pattern so far.
According to experts, during the recent improvement in the market, shares of PSU and Microtech companies have declined significantly, making the value of such shares attractive. This is likely to increase its stake in such companies by FIIs. There have been many examples in the past when foreign funds have increased their stake in such companies when the value of a stock fell and became attractive.
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