About 13 stocks in which, the cumulative holding of FIIs topped 10% in the quarter gone by, have given upto a staggering 297% returns, an analysis of shareholding by ETMarkets showed.
For analysis purposes, ETMarkets has considered companies with a minimum market capitalisation of Rs 500 crore.
Of the 13 stocks, six of them have turned multibaggers in the current financial year.
Topping the list was Suzlon Energy, where FIIs increased their holding to 10.88% in the September quarter, from 7.79% in the June quarter. So far in FY24, the wind turbine maker has been one of the best-performing stocks given investors handsome returns of 297%. Infact, FIIs have increased their bets on the stock for three straight quarters.
The second star performer in the midcap space was Titagarh Rail Systems, where FIIs raised their ownership significantly in the last quarter. The cumulative holding of FIIs as of September end was 16.85% in the stock, compared to 7.05% a quarter ago. For six straight quarters, FIIs have hiked stake in the company and at 16.85%, their holding is at an all-time high. This stock has given stellar returns of more than 190% so far in FY24.
Indo Count Industries was the third stock where FII holding increased by 110 basis points sequentially to top 10% in the September quarter. Interestingly, the number of FII/FPI investors in the textile maker increased to 107 in the quarter from 78, Trendlyne data
showed. The stock has given multibagger returns of more than 147% so far in FY24.
In the oil and gas space, the stock that grabbed FIIs’ attention was Chennai Petroleum Corporation, as their holding increased by a sharp 288 bps sequentially to more than 11% at the end of September quarter. Infact, for eight consecutive quarters, FIIs have raised
their stake in this stock and took the holding to an all-time high. Further, the number of FII/FPI investors jumped up to 154 in the last quarter from 97. Strong buying by the big bulls saw the stock giving multibagger returns of more than 144% so far in FY24.
The fifth stock on FII radar was Syrma SGS Technology, which made its debut in August 2022. The stellar performance of the stock is a consequence of the increasing bets by FIIs on the manufacturing space.
For the second straight quarter, FIIs increased stake in the electronics manufacturing solutions provider, which took their holding above 10% as of September end.
What should investors do?
On a year-to-date basis, the S&P BSE Midcap and Smallcap indices have given a stellar 25% and 30% returns, respectively, whereas the Largecap index has given just 5% returns.
While a section of the market is of the opinion that it’s time to switch to largecap stocks, there are several money managers who are continuing to bet their money on the midcap and smallcap stocks.
“I have always been a small & mid-cap investor, trying to identify top companies in beaten-down sectors…We are still finding companies in the small and midcap sector that are available at inexpensive valuations and continue to invest in them,” said Siddhartha Bhaiya, founder and CIO, Aequitas Investments.
Sharing a thought similar to Bhaiya was Sreeram Ramdas of Green Portfolio, who is on a lookout for the next big opportunity in specific sectors within the small and midcap space.
“Considering the sharp rise in index value since March, it’s natural to think that the index is overvalued, but looking closely, for example, the small and midcap 400 index is just a reflection of 400 stocks, when there are 6,000 other names in the Indian market,” Ramdas said.
(You can now subscribe to our ETMarkets WhatsApp channel)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)