Foreign Institutional Investors (FIIs) have been actively reducing their stakes in Indian equities for some time now, with a notable divestment of ₹1,16,574 crore in the initial three months of 2025. As of April 21, they have further offloaded around ₹18,786 crore in equities. However, beneath this seemingly bleak picture lies a trend of substantial investments in select Indian stocks, providing a glimmer of hope amidst the overall negative sentiment.
Positive Trends Amidst FII Withdrawals
Despite a general withdrawal from the market, certain stocks have attracted renewed interest from FIIs during the fourth quarter of FY25. In fact, several companies have seen their FII holdings rise significantly, indicating that strategic buying opportunities still exist. Here’s a closer look at three standout companies that are capturing investor attention.
1. Dhanlaxmi Bank (DBL)
Dhanlaxmi Bank has experienced a remarkable 8.31% increase in FII holdings during Q4 FY25, bringing total FII ownership to 15.26%. This surge is likely linked to the bank’s improving financial health, particularly its declining Non-Performing Assets (NPAs). In Q3 FY25, the Net NPA dropped to 0.86%, down from 1.27% a year prior.
- Year-on-Year Net Profit Growth: The bank reported an astonishing 551% increase in net profit for Q3 FY25, showcasing strong revenue growth over the past three quarters.
- Positive Banking Sector Outlook: Factors such as recent rate cuts and a liquidity boost from the RBI could be enhancing investor confidence in this sector.
Key FIIs investing in Dhanlaxmi Bank:
- Ares Diversified: 3.74% stake
- Ayushmat Limited: 3.38% stake
- Coeus Global Opportunities Fund: 3.10% stake
2. Aptus Value Housing Finance India Ltd. (APTUS)
Aptus Value Housing Finance, catering primarily to low and middle-income families, saw its FII holding rise by 5.88% in the January-March 2025 quarter, totaling 27.74%. The company’s consistent sales and net profit growth have likely drawn in FIIs.
- Strong Financial Performance: Sales surged to ₹450 crores, a 20% increase YoY, alongside a net profit rise from ₹158 crores to ₹190 crores in Q3 FY25.
- Attractive Dividend Yield: With a yield of 1.38%, Aptus stands out against its peers, making it an appealing choice for FII investment.
Notable FIIs acquiring stakes in Aptus:
- Malabar India Fund Ltd.: 4.18% stake
- WF Asian Reconnaissance Fund: Increased to 4.06%
- Malabar Select Fund: 1.78% stake
3. Cartrade Tech Ltd. (CARTRADE)
Cartrade Tech, an innovative platform connecting car dealers and owners, saw a 5.84% uptick in FII holdings during Q4 FY25, bringing total FII ownership to an impressive 60.96%.
- Rapid Profit Growth: The company reported a 101% YoY increase in net profit in Q2 FY25 and a 94% rise in Q3 FY25, even amid slower sales growth.
- Debt-Free Status: The absence of debt may also appeal to cautious investors.
Top FIIs investing in Cartrade Tech:
- Macritchie Investments Pte Ltd.: 9.13% stake
- The Prudential Assurance Company Ltd.: Increased to 2.91%
- Jupiter India Fund: Increased to 2.34%
Additional Noteworthy Stocks
In addition to the above, FII holdings also increased for:
- Sammaan Capital: Up by 5.16%, totaling 24.69%
- Restaurant Brand: Up by 5.06%, totaling 20.37%
Conclusion: A Silver Lining for Investors
The increased FII holdings in these select stocks suggest potential for growth, particularly in companies like Dhanlaxmi Bank, which is improving its NPA situation, and Aptus and Cartrade Tech, which are witnessing substantial profit increases. Moving forward, it will be intriguing to see if FIIs maintain their investments in these promising stocks.
For more insights on investment opportunities, consider consulting with a financial advisor to tailor your approach to your specific financial goals.
Note: This article is for informational purposes only and does not constitute investment advice.
