Foreign investor holdings in 70 per cent of top 100 Indian firms hit multi-year lows
Overseas ownership in major blue-chip stocks has declined due to selling over the last two years, according to the Economic Times.
Foreign Portfolio Investor (FPI) holdings in nearly 70 per cent of India's top 100 companies have reached multi-year lows, according to the Economic Times. This decline follows two years of continuous selling in blue-chip stocks, indicating a reduced interest in local equities.
The reduction in foreign ownership is widespread but most evident in large companies, particularly within the information technology and banking sectors. Companies including Tata Consultancy Services (TCS), HCL Technologies, Adani Enterprises, Dr Reddy's Laboratories, Maruti Suzuki, Jindal Steel, and Godrej Consumer Products have seen foreign stakes drop to levels not recorded in over 20 years.
Rahul Bhutoria, director and co-founder of Valtrust Capital, stated that the decline reflects a repricing of growth prospects as global investors move towards markets with stronger earnings growth. He noted that this does not constitute an exit from India but rather a reassessment of growth locations.
Bhutoria added that much of the selling was driven by mechanical processes, where passive funds rebalance portfolios based on benchmark weight changes. He also noted that India's weight in the MSCI Emerging Markets index fell from a 2024 peak of about 20 per cent to approximately 11 per cent.
Holdings in 10 other firms, such as Reliance Industries, DLF, and Axis Bank, are at lows exceeding 15 years. Additionally, FPI stakes in 15 companies, including ITC and HDFC Bank, are at three-to-five-year lows, while 10 others are at seven-to-eight-year lows.