Covid-19 turbulence: FPIs turn risk averse, prune holdings in Indian firms

FPIs are the biggest block of shareholders in the domestic market outside the promoter group MFs and insurance companies
The risk aversion triggered by Covid-19 saw overseas investors — considered to be price setters — cut their shareholding in most Indian companies. An analysis of the shareholding data for the March 2020 quarter shows foreign portfolio investors (FPIs) increased their holdings in only two Nifty stocks, and cut their exposure in 21.

 
The trend comes on the back of a Rs 55,000-crore FPI sell-off during the March quarter. FPIs are the biggest block of shareholders in the domestic market outside the promoter group MFs and insurance companies, on the other hand, increased stakes in 17 and reduced their holding in just four.   

 
 In the overall market, out of the 778 companies that have disclosed their shareholding pattern, FPIs cut holdings in 242, while upped their stake in 118. Shareholding in 418 companies was unchanged as overseas funds typically don’t deal much in smaller companies. MFs and insurance generally showed a positive bias as they increased their holdings in more companies than they reduced.


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