Top 5 Stocks Seeing Massive FII Selling

Foreign institutional investors (FIIs), the heavy-spending big-whale bosses who have a good track record of predicting market movement, have started ringing alarm bells.

The FII selling in recent trading sessions has only intensified, impacting the overall market sentiment.

The selling comes regardless of India surpassing GDP growth prospects and riding high on corporate fundamentals.

In today's article, we'll look at the top 5 well-known stocks that have seen massive FII selling in the past couple of quarters.

#1 Dabur India

The first one is Dabur India.

Dabur, an FMCG giant with a well-established household name for over 139 years, is one of the most prolific names in the Indian market.

The company is involved in the production of Ayurvedic medicines and natural products, and now they are a multinational brand that is present in more than 120 countries around the world.

From tasty 'hajmola' to bitter yet effective 'sudarshan ghanvati' medicine to trusted 'chyawanprash', Dabur has a lot of products where it has left a strong impression.

Surprisingly, even though India's economy is doing well as per the current situation, foreign investors have been trimming their stake in Dabur India.

Figures show that their holding declined from 18.37% to 16.49% in the December 2023 quarter.

While FII holding has gone down, promoters of the company have bought stake from the open market, taking their stake to 66.24%.

Indian mutual funds also continue to remain bullish on Dabur's spicy growth journey. Mutual fund holding has gone up from 3.1% in December 2022 to 5.6% in December 2023.

During the quarter under review, the company's gross margin improved on the back of material deflation.

Going forward, the company's focus on power brands is expected to drive growth in its therapeutic division.

#2 GAIL

Second on the list is GAIL.

GAIL (India) Ltd., a popular name now in India's natural gas transmission and marketing business, has been a leader in the Indian energy sector for many years.

Nevertheless, Gail has seen the recent trend of FII selling over the past four quarters.

FII holding has fallen from 14.76% in September 2023 to 14.24% in December 2023.

In fact, FIIs have been selling for more than six consecutive quarters now.

Nevertheless, Gail share price has been on a tear in 2024.

One key factor contributing to the rise in GAIL's share price is the robust demand for gas. This demand surge is fuelled by lower prices of liquified natural gas (LNG) compared to the preceding two years.

This uptick in demand and lower prices is in the favour of top gas transmission companies.

Now, as GAIL is the largest gas pipeline operator in the country, it stands to benefit from this rising demand.

In November 2023, GAIL joined hands with Bharat Petroleum Corporation (BPCL) to supply propane for 15 years which is a key component for GAIL's upcoming petrochemical plant in Maharashtra.

This strategic partnership has an estimated value of Rs 630 bn and it also marks a pivotal step in GAIL's expansion plans.

Furthermore, GAIL's strategic acquisition of JBF Petrochemicals Ltd, a private-sector chemical company, is a noteworthy development. This acquisition adds 1.25 million tonnes of petrochemical capacity to GAIL's portfolio.

The expansion also opens avenues for GAIL to introduce new chemical products, such as purified terephthalic acid (PTA), which will add to its product offerings.

#3 Godrej Consumer Products

Third on this list is Godrej Consumer Products.

Talking about Indian consumer products, Godrej Consumer Products is the leader. The company's been known for years now as a go-to brand for families when it's about getting personal care or household care products.

The Godrej group company has singled itself out in the international arena as well.

FII holding in Godrej Consumer has witnessed a gradual decline for the past couple of quarters. From 23.51% in September 2023, FII holding is down to 22.94% in December 2023.

In December 2022, the FII holding stood at 24% and it has come down to 22.9% since then.

The company is driven by a 3x3 strategy which focuses on three business categories (personal care, hair care, and home care) across three geographies (Asia, Africa, and Latin America).

The company has struggled to grow its net profit over the last few years due to the unprecedented commodity price inflation.

However, it has retained its market share and competitive position in its categories and has not had much of a problem growing its revenue.

It's a debt free company with strong cash flows and a good management. In the long run, the company has a huge runway ahead of it.

#4 Page Industries

Fourth on the list is Page Industries.

Page Industries is the eminent brand in the undergarments and apparel industry of the Indian market.

Besides their mastery in combining technological innovations with fashion style, certainly they've been at the back of popular brands such as Jokey and Speedo that people have worn for years.

After a four-quarter slump, Page Industries' proportion of FII holdings has come down to 21.78% in December 2023.

In December 2022, FII holding stood at 24.66%.

Interesting to note that Indian fund managers have added exposure to the stock for the past two quarters.

Over the years, Page Industries has increased its market share, becoming a dominant force to reckon with in the Indian textile industry.

However, the company has faced increased competition in recent years, both from domestic and international brands.

This has impacted its share price performance on the exchanges.

Notably, direct-to-consumer (D2C) brands pose a significant challenge, along with the growing popularity of private labels offered by large retailers.

For the nine months ended December 2023 quarter, Page Industries reported a 4.7% dip in revenues. Net profit for the same period was 6.4% lower, primarily due to reduced demand.

Looking ahead, the company expects to grow on the back of the country's rising population, strong purchasing power, internet penetration, and evolving fashion trends.

#5 Voltas

Last on this list is Voltas.

Voltas operates as one of the go-to brands for all forms of air conditioners as well as cooling solutions in India, having served individuals for 70 years.

They manufacture HVAC equipment and provide engineering designs which today dominate the Indian market.

For the quarter ending in December 2023, FII holding in Voltas came down to 17.17% compared to 17.83% in September 2023.

As a matter of fact... FII holding has gone down for the past seven quarters.

FIIs Dumping this Tata Stock

While FIIs have been on the selling side, Indian mutual funds turned contrarian on the Tata group company by adding a lot of exposure in the past one year.

Voltas reported a net loss of Rs 276 million (m) in the December 2023 quarter. This was mainly due to the losses incurred in the EMPS segment, which amounted to Rs 1.2 billion (bn).

In FY23, Voltas was forced to make a provision of Rs 1.1 bn mainly due to the back guaranteed encashment and contract cancellation issues.

Voltas is currently facing challenges not just from a single customer. Several of its customers, such as North Gate Mall, Sidra Medical and Research Centre, and Commercial Boulevard Department, have all contributed to the poor financial performance for the Tata company.

Market experts are projecting Voltas to benefit in a falling inflation scenario as margins could improve following a cut in its key raw materials such as aluminium, steel, copper, and high-density polyethene.

Voltas has guided for a positive outlook in the coming quarters. The company said in its latest earnings call that as summer season kicks in, it's ready to meet the demand across air conditioners, commercial refrigerators, air coolers, and home refrigerators.

Snapshot of Stocks Sold by FIIs on Equitymaster Stock Screener

Here's a table comparing the above companies on various parameters -

Equitymaster's powerful BSE/NSE Stock Screener allows you to screen Indian stocks based on both pre-set and your own criteria.

In Conclusion

Do you have an irresistible urge to offload your investments simply because FIIs are selling? Hold on!

The FII activities display their interests in the short term, but not yours. They continuously watch trends worldwide and adjust prices accordingly, which causes markets to be volatile and attracts investors within a short time frame.

Your goal should be to build wealth over the long term.

Focus on the company's fundamentals like financials, growth, and competitive edge. Research and then decide, don't blindly follow what FIIs are doing.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here.