| Company | Value | Change | %Change |
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Among the large caps, private lender IndusInd bank, Star Health and Allied Insurance and Kalyan Jewellers saw the biggest drop in FPI holdings. Interestingly, overseas investors have offloaded shares in most private banks in 2024, according to an analysis of shareholding data.
While their holdings in IndusInd bank shrunk to 24.7% from 42% a year ago, other private lenders like Kotak Mahindra Bank and Axis Bank witnessed a fall of 7.3 percentage points (ppts) each during the same period. The FPI holding in HDFC Bank declined to 49.2% from 52.3% recorded a year ago.
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Other large companies with considerable fall in FPI ownership during the year include Zomato (7.6 ppts), One97 Communications (7.5 ppts) KPIT Technologies(9.1 ppts), Delhivery (8.9 ppts) and others. Additionally, overseas holdings in both L&T Finance and RBL Bank have shrunk less than half to 5.3% and 13.4%, respectively over the last year.
The extended selling by FPIs and the strong US dollar have further weakened the Indian rupee. The local currency hit a record low of 86.7 against the greenback on January 14. Market participants believe that the current vitality in the equity market to remain over the next month, due to multiple factors including the proposed tariff by President-elect Donald Trump and the outcome of the Union budget.
“FPI selling is related to rise in the dollar as investors gear up for higher US inflation,” said Atul Suri, CEO of Marathon Trends-PMS. Suri remains cautious on banks but is bullish on frontline IT stocks, particularly large caps.
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At the end of 2024, nearly 30% of the foreign holdings were held in the financial services sector, which was followed by information technology. The Assets Under Custody (AUC) of FPIs stands at $831 billion, which is 16% of the country’s equity market.
