Many on Dalal Street have been dumping Paytm shares since the Reserve Bank of India (RBI) ordered its unit Paytm Payments Bank to stop many of its activities, citing non-compliance and supervisory concerns. But call it premonition or foresight, foreign institutional investors (FIIs) sensed trouble brewing for the fintech major back in the December quarter itself and were smart enough to dump the stock then.
According to a report by PRIME Database, Paytm shares worth Rs 7,441 crore were offloaded by foreign investors in the December quarter, making it the top sell by FIIs in the quarter gone by. Their holding value in Paytm’s parent company, One97 Communications, dropped to Rs 25,706 crore from Rs 33,148 crore at the end of the third quarter. The poster boy of the fintech sector shed 26% in the last quarter and has plunged 41% in 2024 so far in the wake of RBI curbs.
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Aside from Paytm, shares of Maruti Suzuki and Petronet LNG were also in FPIs’ firing line. Both counters saw FIIs offload shares worth more than Rs 3,000 crore each. Shares of Maruti ended the quarter 3% lower, while that of Petronet LNG slid over 7% during this period.
On a quarterly basis, while FII holdings went down in 689 NSE-listed companies, their share by value in companies listed on the NSE dropped to 18.19% at the end of the December quarter from 18.40% at the end of September.
However, In rupee terms, FII holding stood at Rs 65.11 lakh crore, an increase of 12.69% compared to the last quarter.
Mukesh Ambani’s Jio Financial Services was the fourth most sold stock by foreign investors. The stock saw outflows worth Rs 2,355 crore in the December quarter.
Delhivery, Bajaj Finance, Dabur, Syngene International, ZEEL, and Indraprastha Gas also saw outflows worth more than Rs 1,000 crore each.
Interestingly, while FIIs booked profit in Paytm, small investors have been hit hard since RBI’s announcement on January 31. Retail investors sharply hiked their stake in the Vijay Shekhar Sharma company, buying around 2.89 crore shares in the counter during the December quarter.
Paytm isn’t the only one. Jio Financial, Suzlon Energy, and Maruti Suzuki were also part of retail investors’ shopping lists while being dumped by FIIs.
Despite the recent outflows, Paytm (63.72%) and Delhivery (62.70%) remained among the top companies with the highest FII holdings.
What FIIs bought in Q3
While foreign investors offloaded Paytm shares well before the big drop, they amped up on shares of HDFC Bank. FII holding in India’s largest private sector lender increased by Rs 65,341 crore during the December quarter. The bank’s shares also witnessed heavy selling pressure on Q3 earnings disappointment.
FPIs also added shares of India’s most valued firm, Reliance Industries (RIL), to their cart. The oil-to-telecom conglomerate, which is also India’s first stock to cross Rs 20 lakh crore market cap, saw foreign investors buy shares worth more than Rs 27,700 crore.
Other top additions included Bharti Airtel, Adani Green Energy, Larsen & Toubro, Axis Bank, UltraTech Cement, Infosys, HCL Technologies, and NTPC.
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