Clipped from: https://www.thehindubusinessline.com/money-and-banking/fpis-cut-stake-in-private-sector-banks/article64929740.ece
Pull out close to ₹35,000 crore in the first three quarters of the current fiscal
Foreign investors’ stake in private sector banks have come down in the range of 2-6 per cent as they pulled out close to ₹35,000 crore from the banking sector in the first three quarters of the current fiscal.
A comparison between the FPI holding in the banking stocks at the end of March 2021 and December 2021 shows that the private banks bore the maximum brunt of this massive foreign fund outflow.
Yes Bank witnessed the maximum reduction in the FPI stake. Foreign investor holdings in Yes Bank fell from 13.77 per cent in March 2021 to 8.17 per cent as of December 2021. Their stake at the end of December 2020 stood at 15.01 per cent.
While the FPI stake in Axis Bank fell by 4 per cent to 47.44 per cent as of December 2021 (from 51.43 per cent as of March 2021), the foreign investors pared 3 percent each in ICICI Bank, RBL Bank and IndusInd Bank during the comparable period.
India’s largest private sector lender HDFC Bank and Kotak Mahindra Bank saw 2 per cent reduction in FPI stake in the first three quarters.
Federal Bank and IDFC First Bank were the only two private lenders to witness an increase in the FPI holding. While the FPI holding in IDFC Bank went up to 14.77 per cent as of December 2021 (11.88 per cent in March 2021), the foreign portfolio holding in Federal bank went up marginally to 25.23 per cent (24.05 per cent) during this period.
Market experts said within the banking sector, the FPI sell-off was intense in the private sector banks as compared to PSU banks as the latter have been performing well due to improved asset quality and in hopes of privatisation.
While the Nifty PSU bank index went up by 17 per cent between March 2021 and December 2021, Nifty Private Bank index gained only 2 per cent during this period.
PSU Banks
While the FPI holding in State Bank of India and Bank of Baroda remained static, their holding in Canara Bank went up by 3 per cent. Union Bank of India and Indian Bank also saw FPI stake go up by one per cent. Punjab National Bank alone saw 2 per cent decline in FPI holding.
Ajit Mishra, VP-Research, Religare Broking said, “The banking and the financial sector has the highest weightage in the FPI portfolio as well as in the benchmark index. We believe there is no stock/sector-specific reason for FPI trimming position in private banking but its broad-based selling. At the same time, their exposure in the PSU banking pack is comparatively very low so the scope of further trimming their holding, especially when things are changing for good, seems unlikely.”Published on January 22, 2022COMMENTS
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