Shaping the Market: The Dons of D-Street

Trade on both the bourses, Nifty and Sensex, are greatly influenced by the flow of FIIs in the market. They have been a major indirect player, shaping and restructuring the trade in Indian market. In the second half of 2015, FIIs exited the stocks in a big way. The January-June period of 2016 witnessed the lowest six-month period net investment in five years amounting to $3 billion.

The Silver Lining:

Experts have often indicated that the retail investors must take their cues from the trends of FII investments. The reassurance is that despite a turbulent first two months of 2016, the net FII inflows into the Indian Equities stood strong at Rs. 38,464 crores during August 2016. The month of March has been the beginning of a renewed interest of FIIs in Indian Market. They have turned big buyers on the bourses again. FIIs have made net investments of around $7.3 billion in the equity market since March.

The bullish buying by FIIs catapulted some vital indices in July. The benchmark indices of Sensex and Nifty have been flat in the first six months of 2016. In July, they witnessed the hike of around 8%-9% on the back of active investing by FIIs.

Below is a graph for the net FII investment data for the year 2016.

The Inspiration:

Europe used to be the center of attraction for FIIs, but that was until Brexit that rendered it unattractive. Brazil and Russia has killed their interest as well for underperforming. The fact that India is one of the outperformers has given more comforts to FIIs, hence keeping the Indian story Intact. The monsoon and good economic parameters have helped attracting FIIs inflow. Moreover India has also benefitted from FIIs commitment of allocation to the emerging markets. Addition to that, appointment of Urjit Patel as the Governor of RBI may also ignite the interest of FIIs in Indian market.

The Dons:

As of June 30, the top 10 FIIs hold shares worth over Rs. 2 lakhs crores. Europacific Growth Fund holds over 1% stakes in 16 Indian firms amounting to the investment of Rs. 51,564 crores. Europacific has over 7.9% of net assets invested in India and has total asset under management of $125,384 million. In total, it holds stake in over 260 companies. HDFC Bank, ICICI Bank, Axis Bank, Maruti Suzuki, Tata Motors, Grasim Industries, Reliance Industries, Reliance Communications and Idea Cellular are some of the companies where it holds stake.

The next big shot is the Government of Singapore with 19% of its investments in emerging market equities. It has investments in 33 domestic firms amounted to Rs. 41,085 crores. Dr Reddy’s Labs, Infosys, HDFC, HDFC Bank, DLF, Lupin and M&M are some among other largecap stocks where it has invested.

Investment bank Oppenheimer Holdings have invested about Rs. 27,073 crores in 14 domestic firms. Oppenheimer Developing Markets Fund manages assets worth $28.6 billion had 14.6% of investments in India.

Abu Dhabi Investment Authority has investments in 21 companies, valued at Rs. 18,943 crores. The fund generally doesn’t invest more than 20% in the emerging market equities.

The Government Pension Fund Global has investments worth Rs. 14,600 crores in 77 Indian firms. From PI Industries to Ahluwalia Contracts, Allcargo Logistics to Century Plyboards to IIFL Transportation, this fund had investments in 248 firms across different sectors by the end of 2015. There are many listed firms, where the fund has less than 1% stake and, hence, they go unnoticed.

Below is the list of top 10 Dons of Dalal Street with huge Investments across various sectors in Indian Stock Market.

With the increased inflow of FIIs recently, Indian Market has started to show promising results. After the decline for three straight quarters, the foreign investor’s ownership has increased for two succeeding quarters in June. FIIs shareholding in NSE listed companies has touched 20% and has come on the back of robust investments in the stock market.

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