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Stocks With The Biggest Cut In Foreign Ownership During Pandemic

30 Nifty 50 firms have so far disclosed their foreign shareholding for March quarter. Of these, 27 firms saw a cut.

An employee uses scissors to style the neck line of a woolen jumper at the JM Smedley factory in Matlock, U.K.. (Photographer: Chris Ratcliffe/Bloomberg)
An employee uses scissors to style the neck line of a woolen jumper at the JM Smedley factory in Matlock, U.K.. (Photographer: Chris Ratcliffe/Bloomberg)

Overseas investors pared shareholding in Indian companies in their worst selloff in the domestic equity market on fears that the new coronavirus pandemic will cause a recession.

Of the 30 Nifty 50 constituents that have disclosed foreign shareholding as of March-end, 27 reported a decline in overseas ownership since December, according to data compiled by BloombergQuint.

Eicher Motors Ltd. — the maker of the Royal Enfield motorcycle — witnessed the sharpest cut, followed by Tata Steel Ltd., Axis Bank Ltd. and ICICI Bank Ltd. On the other hand, foreign holding in Zee Entertainment Enterprises Ltd., Dr. Reddy’s Laboratories Ltd. and Wipro Ltd. rose marginally during the period.

Domestic equities tracked global peers in a worst selloff in more than a decade after the Covid-19 outbreak stalled trade. India went into the world’s most stringent lockdown to curb the virus’ spread, prompting economists to slash the nation’s growth forecast for this year as they expect the shutdown to lead to an output loss. January-March saw Nifty 50 tumble 29.3 percent—the worst quarter since 1992. It was also the worst ever drop for the Sensex, which tumbled 28.57 percent during the period.

While the benchmark indices recovered some losses after the central bank and the government announced stimulus and select sectors reopened, overseas investors continue to flee.

Foreign institutional investors, according to National Securities Depository Ltd., pulled out a net Rs 48,030 crore from the Indian equity market in the last quarter of the financial year ended March. In March alone, they sold equities worth Rs 60,000 crore — the highest in a single month. In April so far (as of the 29th), foreign institutional investors have sold Rs 7,718 crore worth of equities.

Foreign investors also cut shareholding in BSE 500 constituents.

Thirty-two of the top 50 BSE 500 firms with the highest foreign holding have disclosed the data for the fourth quarter as of April 29. Of these, 78 percent or 25 companies witnessed a cut since December, while seven saw a rise.

Mahindra & Mahindra Ltd. witnessed the highest selling by such investors, followed by non-bank lender Manappuram Finance Ltd., mid-sized information technology company Mphasis Ltd. and India’s largest multiplex chain operator PVR Ltd.

FII holding, however, slightly increased in Federal Bank Ltd., Edelweiss Financial Services Ltd. and Shriram Transport Finance Company Ltd., among others, during the period.

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