In August, foreign portfolio investors (FPIs) became net buyers in Indian markets for the second month in a row, owing to low crude oil prices and strong macroeconomic fundamentals. FPIs pumped a net amount of ₹51,000 crore into Indian equities during August. This was the highest investment made by foreign investors since December 2020, when they infused a net of ₹62,016 crore in equities, PTI reported, citing depositories data. In July, FPIs invested nearly ₹5,000 crore.
Data from Trendlyne showed that foreign investors preferred to raise stakes in small and midcap companies. Stocks in which FIIs raised majority stake in the June 2022 quarter include names like Max Healthcare Institute, Gujarat State Fertilizer & Chemicals Ltd, Varun Beverages Ltd, PVR, and Indiabulls Real Estate Ltd.
FIIs raised their stake in Max Healthcare Institute to 23.34 percent, up from 14.59% in the June quarter. On the other hand, mutual funds also raised their holdings, from 17.47 percent to 19.21 percent in the same time period. Since the June 2021 quarter, FIIs have been increasing their stake, but the majority of the increase happened in the most recent quarter. Promoters currently hold 50.64 percent of the shares in the company.
Meanwhile, on August 16, global investment firm KKR sold its entire 27 percent stake in the company for over ₹9,100 crore. The shares were picked up by a host of entities, including the Government of Singapore, the Monetary Authority of Singapore, Smaller Cap World Fund Inc, New World Fund Inc, WF Asian Smaller Companies Fund Ltd, and BNP Paribas Arbitrage, according to media reports.
The other stock where FIIs were bullish in the last quarter was IndiaBulls Real Estate. Foreign investors' stake in the company stood at 22.4% in the June 2022 quarter as against 18.41% in the March quarter. While the public holds the largest stake in the company with 71.6 percent.
On the financial side, the company reduced its debt by 54%, to ₹464 crore, in the June-ending quarter compared to the March quarter. In the investor presentation, IBREL said its net debt stood at ₹464 crore at the end of the June quarter, as against ₹1,005 crore as on March 31, 2022. Its gross debt fell to ₹739 crore from ₹1,310 crore.
On the operational front, the company's sales bookings fell to ₹297 crore in the first quarter of this fiscal year, from ₹350 crore in the corresponding period of the previous year.
PVR, a leading multiplex chain operator, saw its FIIs holding rising from 33.3% in March 2022 to 36.6% in the June 2022 quarter. FIIs have been bullish on the company for a long time.
The promoters own 17% of the shares in the company. Mutual funds reduced their holdings from 19.18% to 17.94% in the June 2022 quarter. Regular shareholders own 20.26 percent of the company.
PVR shares have dropped around 10% in the last month as investors have fled multiplex stocks due to the poor performance of Bollywood films.
The company reported the highest ever revenue and net profit of ₹1,000.4 crore and ₹68.3 crore, respectively, in the June-ending quarter, but this was largely driven by higher food and beverage revenue, lower employee costs, and higher other income, say analysts.
Meanwhile, FIIs have raised their stake in Varun Beverages to 23.9 percent in the June quarter from 21.0 percent in the March 2022 quarter. The number of FIIs investors increased from 343 to 385 in the same period.
The company is one of the largest franchisees of PepsiCo in the world. It produces and distributes carbonated drinks, juices, and packaged drinking water in six countries, including India.
FIIs also increased their stakes in Polyplex Corporation, IIFL Finance, Praj Industries, Eris Lifesciences, Tata Elxsi, Hinduja Global Solutions, PB Fintech, Welspun Corp, Ashok Leyland, Angel One, Delta Corp, EID Parry, and Brightcom Group by 1.5-2.5 percent.
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