FPI holdings of Indian stocks dip to a decadal low of 16.3% in January
₹62 lakh crore worth Indian stocks as of January 2024-end, against the aggregate market capitalisation of ₹380 lakh crore. This implies that FPI holdings in Indian equities fell further to 16.3% at the end of January 2024, which is a decadal low, from 16.6% as of November 2023, according to ICICI Securities.
The lowest holding of FPIs in recent times is driven by incremental selling in 2024 so far, which is around $3.5 billion, and significant outperformance of small caps, where FPIs have lower allocation along with their overall portfolio orientation, the brokerage said in a report. Also Read: Dixon Technologies, Whirlpool: Jefferies downgrades to underperform on stretched valuations, subdued performance In the calendar year 2023, FPI buying in midcaps and smallcaps was much higher than in largecaps, thereby resulting in their holdings of mid and smallcaps rising to 17% and 9%.
As of December 2022, FPIs held 78% of their portfolio within large caps while their holdings in mid and small-caps were at 14% and 8%, based on shareholding data of top-1,000 stocks by marketcap. From a macro perspective, an environment of relatively resilient growth in India’s GDP and corporate earnings coupled with rising probability of moderation in interest rates going ahead is positive for institutional flows towards India, said ICICI Securities.
In 2024 so far, FPIs have been net sellers worth $3.5 billion and domestic institutional investors (DII) have been net buyers worth $5.6 billion of Indian stocks. Major FPI outflows were observed in financials, discretionary consumption, FMCG sectors, etc.
while inflows have been observed in IT, energy, power, telecom sectors, etc., as per the report. “On the global front, the hopes of interest rate
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