Where are DIIs increasing their stake?

Using Nifty-500 as a benchmark, DIIs were significantly overweight in PSU Banks, Metals, Capital Goods, Automobiles, and Consumer, while being underweight in Technology, NBFCs, and Private Banks

The equity market after touching key technical has once again bounced back from lower levels. After touching an all-time intra-day high of 18604 on October 19, Nifty 50 fell by almost 5 per cent in the following few sessions. Nifty 500 saw a fall of almost 7 per cent in the same period. One of the reasons for such fall was selling by FIIs. Before such selling, FIIs were increasing their share in Nifty 500 companies by 40 basis points on yearly basis. FIIs increased their ownership on a sequential basis in 53 per cent of Nifty 500 companies for the quarter ending September 2021. 

When it comes to action from DIIs, according to a strategy report by Motilal Oswal Financial Services Limited (MOFSL), using Nifty-500 as a benchmark, DIIs were significantly overweight in PSU Banks, Metals, Capital Goods, Automobiles, and Consumer, while being underweight in Technology, NBFCs, and Private Banks. Overall, the top 5 sectoral holdings of DIIs in the Nifty-500 accounted for 65 per cent of the total allocation – BFSI (28.1 per cent), Technology (10.7 per cent), Oil & Gas (10 per cent), Consumer (9.8 per cent), and Healthcare (6.3 per cent). 

In the second quarter of FY22, DIIs increased their weight on a sequential basis in sectors such as NBFCs (increased by 40 basis points), Retail (increased by 30 basis points), Telecom (increased by 30 basis points), Consumer (increased by 20 basis points). Sectors, where they reduced their weight on a sequential basis, is in Technology, Metals, Automobiles, Capital Goods, and PSU Banks. 

Out of the total DIIs holdings of USD 450 billion in the Nifty-500, Private Banks topped at USD 68 billion, followed by Technology at USD 48 billion and Oil & Gas at USD 45 billion. 

The top 5 stocks by holding value were Reliance Industries (USD 29.4 billion), HDFC Bank (USD 22 billion), ICICI Bank (USD 22 billion), ITC (USD 17.1 billion), and Infosys (USD 15.1 billion).