Despite the ongoing foreign institutional investor (FII) exodus from Indian equities, a handful of companies have seen consistent FII shareholding increases every quarter over the past year.
Data from NSDL as of February 24, 2025, highlights that while FIIs have pulled out over ₹1 lakh crore in net investments this year, these nine stocks have attracted steady institutional interest:
- SKF India
- Affle India
- ICRA
- UTI Asset Management Company (AMC)
- KP Energy
- Natco Pharma
- Hind Rectifiers
- Archean Chemical Industries
- Indraprastha Medical Corporation
FII Outflows and Market Volatility
Indian stock markets have been under pressure as FIIs continue to sell off in large quantities, contributing to elevated volatility and investor concerns. The ongoing FII outflows are driven by a combination of:
- High valuations in Indian equities, leading to profit booking.
- Attractive alternatives in China, as investors chase growth opportunities in AI, robotics, and EVs.
- Global macroeconomic uncertainties, including tight liquidity conditions and rising interest rates.
- Concerns over India’s slowing economic growth, corporate earnings downgrades, and INR depreciation.
Nomura’s Cautious Outlook on Indian Markets
Japan-based brokerage Nomura Holdings has retained a structural overweight call on India but warned of potential further valuation compression. The firm pointed out that MSCI India trades at a PE ratio of 21x, slightly above its historical average of 19.6x (2015) and 21.5x (2022).
Nomura emphasized that while current valuations may seem reasonable, they are not compelling enough to attract aggressive buying, especially as investors reallocate funds to China amid the country’s resurgence in technology-driven industries.
The brokerage also highlighted concerns over:
- Tight banking sector liquidity impacting corporate lending and growth.
- Tariff risks from the US administration, which could weigh on export-driven companies.
- A weakening rupee, exacerbated by continued FII outflows.
While FIIs remain net sellers in Indian markets, the fact that nine companies have consistently attracted institutional interest suggests that investors are selectively betting on stocks with strong fundamentals and long-term growth potential.
Disclaimer:
The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. Always conduct your own research or consult a financial advisor before making investment decisions. Neither the author nor Business Upturn is liable for any financial losses incurred based on this information.
