FIIs & DIIs are Bullish on These 5 Indian Stocks. Do You Own?

Foreign institutional investors (FIIs) in NSE-listed companies witnessed a significant decline, reaching an 11-year low of 17.7% in the last quarter.

This 0.5% drop from 18.2% in the previous quarter highlights a shift in investor sentiment.

Domestic Institutional Investors (DIIs) bucked the trend with net inflows of Rs 1 trillion (tn). This propelled their shareholding to a record high of 16.1% in March 2024.

This up move from 15.9% in December 2024 narrows the gap between FII and DII holdings to an all-time low. DII holdings now sit just 9.2% below those of FIIs.

Amid this FII selling a silver lining emerges. A select group of companies defied the trend, attracting significant FII inflows.

This was alongside the continued buying from domestic institutional investors (DIIs) during the March 2024 quarter.

Here are five such companies.

#1 Pricol

First, on the list is Pricol.

The company is the world's second-largest maker of driver information systems for two-wheelers, with more than 50% market share in India.

In the CV segment and off-road vehicles, it is among the fourth largest globally and has over 70% market share in driver information systems in CVs.

The latest shareholding figures for Pricol indicate a notable uptick in FII ownership, climbing from 6.5% in the December 2023 quarter to 14.4% in the March 2024 quarter, reflecting a substantial increase of 7.9%.

DIIs have also augmented their stake, from 6.9% in the December 2023 quarter to 16.6% in the March 2024 quarter, up 9.7%.

This can be because Pricol is making strong inroads and getting future-ready for the EV segment by collaborations with startups, etc.

Pricol is also the sole supplier to TVS iQUBE.

To further deepen its presence in the EV space, Pricol has entered an international licensing agreement with BMS PowerSafe, to manufacture and sell a battery management systems (BMS) for the Indian market.

In this partnership, Pricol will be licensing the product and process technology of BMS from the partner and will manufacture the complete BMS in-house. This will allow Pricol to offer a pure-play EV product.

The management said in its recent conference call that growth was impacted due to lower production of EV vehicles and deferment of schedules due to the FAME subsidy issue.

Going forward, Pricol is aiming for at least 20% growth over the next 3-4 years.

For more details, see the Pricol company fact sheet and quarterly results.

#2 PSP Projects

Second on the list is PSP Projects.

PSP Projects enjoys a diverse set of construction and allied services across all kinds of construction projects in India.

The company caters to different segments like industrial, institutional, government, and residential. It is known for its timely execution and ability to bid for high-value projects.

The most recent shareholding data for PSP Projects shows a significant rise in FII stake, increasing from 2.3% in the December 2023 quarter to 6.6% in the March 2024 quarter, marking a growth of 4.3%.

At the same time, DIIs have also increased their stake from 4.6% in the December 2023 quarter to 9.2% in the March 2024 quarter, a substantial increase of 4.2%.

This surge in investor interest can be attributed to the company's consecutive order wins. In January 2024, PSP Projects emerged as the lowest bidder for a dairy plant development project in Rajkot, Gujarat, valued at nearly Rs 4.5 billion (bn).

Furthermore, on 15 February 2024, the company secured another construction order worth Rs 6.3 bn in Gujarat for the construction of Gati Shakti Vishwavidhyalaya at Vadodara for Rail Vikas Nigam.

This order is slated for completion within two and a half years.

The company's strong plans have likely fueled the stock buying by FIIs and DIIs. PSP Projects, based in Ahmedabad, aims to achieve revenue of Rs 25-26 bn by the end of the last financial year (FY24).

In the current financial year (FY25), the company has targeted revenue of Rs 30 bn. The company expressed confidence in surpassing the Rs 30 bn order inflow target for FY24 and expects the order inflow to reach Rs 36 bn for FY25.

For more details, see the PSP Projects company fact sheet and quarterly results.

#3 Aavas Financiers

Next on the list is Aavas Financiers.

Aavas Financiers is a housing finance company in India.

The company provides housing loans to customers belonging to the low and middle-income and self-employed segments, in suburban and rural India.

The latest shareholding pattern of Aavas Financiers reveals a notable increase in FII stake. It rose from 32.3% in the December 2023 quarter to 34.8% in the March 2024 quarter, a growth of 2.5%.

DIIs have also increased their stake from 15.3% in the December 2023 quarter to 24% in the March 2024 quarter, reflecting a substantial increase of 8.7%.

This surge in investor interest can be attributed to the company's robust performance in the December quarter. Aavas Financiers reported a 23.5% year-on-year (YoY) increase in revenue, reaching Rs 5.1 bn, with net profits soaring by 8.95% to Rs 1.2 bn.

This stake rise can be further attributed to a strong long-term outlook. Aavas Financiers' loan growth is expected to improve after the company's technology rollout is complete.

The adoption of new technology platforms in its more than 350 branches and attrition affecting loan sourcing had an impact on loan growth.

Now, the company is aiming to diversify the loan sourcing channels by connecting with local sourcing ecosystems rather than relying on direct sourcing channels. It intends to expand branches by 10%.

The company has already tied up with e-mitra, the Rajasthan government's network, to offer multiple services.

Going forward, the company is targeting loan growth at the top end of its 20-25% guidance.

For more details, see the Aavas Financiers company fact sheet and quarterly results.

#4 Tips Industries

Fourth on the list is Tips Industries.

The company is engaged in the business of production and distribution of motion pictures and the acquisition and exploitation of music rights.

The latest shareholding figures for Tips Industries indicate a notable uptick in FII ownership, climbing from 0.9% in the December 2023 quarter to 2.1% in the March 2024 quarter, reflecting an increase of 1.2%.

DIIs have also augmented their stake, from 0.9% in the December 2023 quarter to 8.2% in the March 2024 quarter, up 7.3%.

This uptrend can be attributed to the company's robust performance in the December quarter. Despite facing intensified competition in the content acquisition market, Tips Industries achieved a 27% growth in revenue.

Profits surged by 72%. The board declared an interim dividend of Rs 3 per share.

The company recently announced a share buyback program to repurchase up to 0.6 m equity shares worth Rs 372 m for Rs 625, compared to the current market price of Rs 500.

Additionally, Warner Music, the global record label, extended its partnership with Tips Industries for another four years.

Looking ahead, the company is focused on acquiring content from external sources to drive future growth.

For more details, see the Tips Industries company fact sheet and quarterly results.

#5 Dixon Technologies

Last on the list is Dixon Technologies.

The company is a multinational electronics manufacturing and services company.

It offers design-focused solutions in consumer durables, home appliances, lighting, mobile phones, and security devices.

Dixon's strength lies in large-scale manufacturing and a focus on cost-effectiveness, which has the potential to drive wider adoption of photonics-based products within the Indian market.

Recent shareholding data for Dixon Technologies shows a rise in FII ownership, increasing from 17.4% in the December 2023 quarter to 17.9% in the March 2024 quarter.

At the same time, DIIs have also increased their stake, climbing from 26.4% in the December 2023 quarter to 27% in the March 2024 quarter.

This rise in stake can be attributed to several factors. First, Dixon Technologies witnessed a doubling of revenue from operations to Rs 48.2 bn. This was driven by increased demand for smartphones in India, which bolstered its mobile and electronic manufacturing business.

The company reported an impressive 86% growth in the December quarter, benefiting from surging demand for technology gadgets and the rapid expansion of electronics manufacturing in the country.

Dixon Technologies has renewed focus on the production-linked incentive (PLI) scheme for the mobile manufacturing sector and proposed the introduction of a fresh PLI dedicated to electronic components. The company is actively collaborating with the government to this end.

The company recently signed a share purchase agreement with Ismartu Pte Ltd., aiming to acquire up to 56% equity in the latter in two tranches. This strategic move aligns with Dixon's expansion goals in the segment.

Looking ahead, Dixon Technologies plans to expand its product range, positioning itself for continued growth and success in the dynamic electronics manufacturing landscape.

For more details, see the Dixon Technologies company fact sheet and quarterly results.

Conclusion

FII and DII buying activity can be tempting to follow as these institutions offer valuable insights. Their extensive research teams and access to information might uncover strong fundamentals or growth potential.

However, its important to remember that their investment strategies may not align with your own financial goals, risk tolerance, or investment horizon.

FIIs and DIIs often have different objectives, time frames, and risk appetites compared to individual investors. They may be investing for short-term gains, long-term growth, or to meet specific portfolio requirements.

Further, by the time FIIs and DIIs investments are publicly disclosed, the stock price may have already moved, potentially reducing the upside potential and increasing the risk.

Therefore, one should conduct thorough research to ensure the company aligns with your investment goals and risk tolerance.

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...