FPIs are betting on these stocks despite the market downturn

In a bold move that defied the broader market downturn, foreign portfolio investors (FPIs) strategically increased their stakes in select Indian companies during the December quarter, even as they pulled out ₹1 trillion from the markets in the third quarter of 2024-25. 

This surprising trend highlights FPIs’ continued confidence in the long-term growth potential of select stocks, even amid short-term volatility.

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According to data from Prime Database, FPIs raised their holdings in 766 companies, with these stocks collectively rising an average of 1.87% during the quarter. Their most notable moves include Indiabulls Enterprises Ltd, in which they increased their ownership by 17.06 percentage points. This resulted in a remarkable 53.2% surge in its stock price, reflecting investors’ optimism in this stock. That said, the company reported a decline in net sales to ₹13.32 crore in Q3FY25 from ₹15.03 crore in the year-ago period, along with a wider net loss of ₹2.13 crore, compared to a year ago's ₹1.84 crore.

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Home First Finance Co. (India) also saw significant FPI activity, with their stakes increasing by 12.34 percentage points even as the stock price dipped 11.03%. This disconnect suggests continued investor confidence in the company's long-term prospects. While the stock underperformed, financials stood up: the company posted a 23.55% year-on-year rise in net profit in Q3 FY25, and total income grew by 35.4%. Assets under management (AUM) also grew strongly, reaching ₹11,949 crore, reflecting a robust 32.6% expansion on-year.

Other companies on these overseas investor’s radar included Himatsingka Seide Ltd, a textile manufacturer, where FPIs increased stakes by 8.74 percentage points. The stock price surged by 27.65% following the successful completion of a ₹400 crore equity fundraising via a qualified institutional placement (QIP). The company plans to use the funds to reduce its outstanding debt. 

GE Vernova T&D India Ltd, GE's grid solutions business in India, also saw increased FPI interest. Their stake jumped from 6.82% to 12.05% in the December quarter, driving a 23.50% stock price increase. Projected earnings per share (EPS) growth for the company is strong, at 29.3% for 2025-26 and 39.3% for 2026-27.

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However, FPI investment wasn't a guaranteed win. While some stocks benefited, others, such as One Point One Solutions Ltd, IDFC First Bank, GMM Pfaudler Ltd, KBC Global Ltd, Network18 Media & Investments Ltd, and Ugro Capital Ltd, saw prices fall despite increased FII stakes.

According to Prime Database, FPI ownership in NSE-listed companies fell from 17.55% on 30 September 2024 to 17.23% on 31 December 2024. The total value of their holdings was ₹74.90 trillion, a decline of 8.52% from the previous quarter.