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What Foreign Investors Bought And Sold In June

Here’s where foreign investors parked their money after Prime Minister Narendra Modi returned to power.

 A man dressed as a businessman holds a briefcase covered in U.S. dollar notes. (Photographer: Simon Dawson/Bloomberg)
A man dressed as a businessman holds a briefcase covered in U.S. dollar notes. (Photographer: Simon Dawson/Bloomberg)

Foreign portfolio investors remained net buyers for the fifth straight month in June but funnelled the least amount in five months.

Overseas investors pumped $374 million into the equity market last month, according to National Securities Depository Ltd. data. That’s the lowest since January after which they turned buyers.

This comes as India’s equity benchmark NSE Nifty 50 declined 1.1 percent in June—the most since October 2018. The stocks have remained volatile after hitting a record following Prime Minister Narendra Modi-led Bhartiya Janta Party’s returned to power with a bigger mandate.

The insurance sector received the highest inflows in June with overseas investors pumping in $451 million, of which $376 million came in the last 15 days, NSDL data showed. Foreign investors remained net buyers in the insurance sector for the seventh consecutive month.

To be sure, the data on foreign investments into individual stocks in June was not available. However, FPIs may have shown interest in SBI Life Insurance Company Ltd. BNP Paribas Cardif had offered to sell 2.5 crore shares of SBI Life Insurance in the open market during the second half of June. The offer for sale was subscribed 3.81 times, according to data available on the National Stock Exchange.

Besides, here are other stocks that may have gathered foreign investors’ interest after their shares were sold last month:

  • Cimmco Ltd.’s promoter Titagarh Wagons Ltd. had planned to sell 4.49 percent stake in the company aggregating to Rs 3.6 crore. The OFS was subscribed 12.33 times last month.
  • Adani Green Energy Ltd.’s promoter group under the name of Gautam S Adani had planned to sell cumulatively 5.98 percent stake in the company. The offer was subscribed 1.36 times.
  • Reliance Nippon Life Asset Management Ltd.’s promoter Reliance Capital Ltd. had planned to sell up to 1.75 crore shares in the company through an offer for sale. The offer was subscribed 2.58 times.

Capital goods sector received the second-highest foreign funds, according to data compiled through NSDL. The sector received $265 million in June, the highest in nearly three years. Of this, $137 million came during June 16-30.

Meanwhile, S&P BSE Capital Goods Index, comprising stocks of 24 companies, fell 0.42 percent, dragged down by the fall in Graphite India Ltd. and HEG Ltd.

The insurance and capital goods sector were followed by NBFC, and automobiles and auto components.

What Foreign Investors Sold In June

Software and services sector witnessed the highest foreign fund outflows last month.

Overseas investors remained net sellers for the third consecutive month and pulled out $301 million from the sector in June, of which $239 million was withdrawn during the second half of the month.

While the data for outflows was not available for individual stocks, the sell-off may have been triggered by Larsen & Toubro Ltd. open offer for Mindtree Ltd. to acquire controlling stake in the software services provider.

The NSE Nifty IT Index fell 1.39 percent during the period, led by the fall in Oracle Financial Services Ltd. and Tech Mahindra Ltd.

The software and services sector was followed by pharmaceuticals and biotechnology, banks and construction materials on foreign outflows.