FPIs raise stakes in Yes Bank, IDFC First and Axis Bank in FY23

Foreign investors’ holdings in several private sector banks declined marginally in FY23 as they pulled out nearly Rs 30,000 crore from the banking and financial services sector.

According to the latest shareholding data, Foreign Portfolio Investors (FPIs) hold in RBL Bank It fell 4 percent in the previous fiscal year to 25 percent as of the March 2023 quarter. IndusInd Bank Also, FPI reduced its exposure by 4 percent to 42.16 percent during this period.

FPIs own stakes in India’s largest private sector bank HDFC Bank decreased by 3 per cent while their share in Bandhan Bank And Kotak Mahindra Bank by 2 percent and 1 percent, respectively. FPI’s contribution ICC Bank It remained unchanged at 44 percent in fiscal ’23.

Kranthi Patini, Director Equity Strategy, WealthMills Securities says the decline in shareholding in the banking sector is mainly due to FPI sell-offs in the general banking and financial services sector in the previous financial year and not due to any concerns about the performance of any of these private banks or the Indian banking system.

In fact, the banking sector is the one that currently holds the markets. ICICI Bank, HDFC Bank, RBL Bank and IDFC First Bank reported excellent results for the March quarter.

net buyers

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that foreign investment institutions were persistent sellers in the Indian market during the fourth quarter of FY23. “When they sell, they sell in segments where they make big profits. This explains the lower exposure in private banks .

In FY23, FPIs withdrew ₹29,921 crore from banking and financial services sector. The sector was the third biggest loser of FPI funds in FY23 after IT Services (Rs. 51,138 crores) and Oil & Gas (Rs. 37,674 crores).

However, foreign investors have turned into net buyers in the Indian stock market since the beginning of the current financial year. In the first two weeks, FPIs were net buyers in the financial services sector, mainly in banks, to the tune of $4,410 crore.

Favorite FPI

In previous public finances, foreign investment institutions increased their stakes in such banks Yes bank (by 12 per cent), IDFC First Bank (6 percent) and Axis bank (2 per cent). Foreign financial institution holdings in Yes Bank increased to 23.1 percent as of March 2023 from 10.97 percent in March 2022. The significant rise in FPI holdings in Yes Bank was at the expense of major private equity firms Carlyle and Advent will acquire a 9.99 percent stake At Yes Bank for about INR 8,896 crore during the December quarter.

Although Axis Bank recorded a Net loss of ₹5,728 crore for the March quarter because of Acquisition of Citibank’s retail banking businessBatheny believes that FPIs would have raised its stake in Axis Bank given the long-term growth prospects that would arise from the acquisition.