Whenever Foreign Institutional investors (FIIs) ramp up their stake in a company, they often do it after proper due diligence as their stakes are worth thousands of crores of rupees. They also have the best resources to conduct research which are generally out of reach of small investors. Hence, stocks on their radar are closely watched by the street.
In that vein, here I am about to tell you the top three companies from the Nifty 500 index that have garnered the highest FII interest in the last 6 months, as depicted by their shareholding pattern.
Max Healthcare Limited
Max Healthcare (NS:MAXE) is the first company on the list and is essentially a hospital chain with a market capitalization of INR 40,861 crores. The staggering growth in the company’s profit in FY22 was probably a big determinant of FII interest, as net income rose over a massive 539.8% to INR 605.05 crores. This figure was just a mere INR 15.79 crores in FY17, depicting a 5-year CAGR of 107.3%. Now that’s something!
FIIs which held a stake of 14.23% in the company, as of March 2022 have ramped up their interest to 49.27%, as of September 2022, making it the favorite amongst these institutional investors in the last 6 months. In other words, almost half of this hospital chain is now owned by FIIs.
Brightcom Group Limited
The next up on the list is a small-cap company engaged in providing digital marketing services, and development of computer software and services - Brightcom Group (NS:BRIH), having a market capitalization of INR 7,265 crores. The company’s revenue jumped 74.4% on a YoY basis in FY22 to INR 5,017.37 crores which resulted in an 88.8% rise in net income to INR 912.21 crores, the highest ever.
The stock also seems quite undervalued with a P/B ratio of 1.37, compared to the sector’s average of 6.58. On the shareholding front, FIIs increased their interest from 1.87%, as of December 2021 to 13.55%, as of June 2022, depicting an addition of 11.68% in 6 months. The September 2022 quarter details are yet to be out.
Dr Reddy’s Laboratories Limited
Dr. Reddy’s Laboratories Ltd (NS:REDY) is the third company that has seen the highest FII buying in the last 6 months (from the Nifty 500). It is a pharmaceutical company with a market capitalization of INR 75,001 crores and a dividend yield of 0.67%. Over the last 5 years, the company’s net profit has grown at a yearly rate of 11.05%, compared to the sector’s average of 3.92%, and it posted a profit of INR 2,182.5 crores in FY22, the highest since FY15.
As of the March 2022 quarter, FIIs held an interest of 25.16% in the company which jumped to 36.34% by the September 2022 quarter. In fact, DIIs also hold a good 11.86% stake, which jumped from 9.23% a year ago.