INSUBCONTINENT EXCLUSIVE:
MUMBAI: Top foreign portfolio investors (FPIs) have trimmed their exposure to Indian private lenders since October in the sell-off that
resulted in them pulling Rs 29,000 crore out of Indian equities during the month.
FPIs, including Franklin Resources, BlackRock, Fidelity
and T Rowe Price, sold shares to a tune of $2 billion (Rs 14,200) crore during the period in private banks alone, data compiled from
private sector banks contributed to their concerns.
The sell-off was particularly intense among the commercial lenders such as ICICI and
Axis Bank where FPIs sold shares worth more than Rs 4,000 crore each
Even the bellwether stocks such as HDFC Bank and Kotak Mahindra have seen selling from FPIs indicating a significant shift in the investment
financial services research at Macquarie
the most by any FPI during the period
Franklin Resources had offloaded shares worth Rs 1,367 crore in ICICI Bank and HDFC Bank put together
BlackRock, on the other hand, has sold shares worth Rs 960 crore in HDFC Bank, Kotak Mahindra and Indusind Bank together
Chicagobased Harris Associates had sold shares worth Rs 1,441 crore in Axis Bank in early November, data showed.
The actual sell-off could
be much higher since the data only considers those FPIs who have disclosed the changes in their portfolios as a part of regulatory filing in
Analysts peg the total outflow from private banking stocks at around $2.5-3 billion.
Private banks have been on the forefront of the recent
bull-run which started early 2017
The Private Bank Nifty, a gauge for private banking stocks, has gained 50 per cent since 2017, beating the 31 per cent return given by
benchmark Nifty.
Typically, FPIs have been overweight on most of the private sector banks in the last two years on account of strong growth
potential and favorable macros.
However, the market landscape underwent a significant change in September-October starting with the credit
This led to an initial bout of selling in the banking space as most of the bigticket lenders have significant exposure to ILFS
This was followed by the steep fall in the shares of Dewan Housing and Finance (DHFL) on rumors that the NBFC could default on its debt
During the period, the rupee also weakened significantly against the US dollar shifting the focus towards export-oriented sectors such as
