Domestic institutional investors pulled out $2.2 billion in Q4 FY14 alone and continued to be net sellers in Indian equities for the fourth consecutive year, with $8.9 billion outflows in FY14.
On the other hand, foreign institutional investors have been consistent net buyers in Indian equities for the entire decade (except during the global meltdown of FY09). FIIs pumped in $4 billion in Q4 FY14, taking the cumulative inflows of FY14 to $13.7 billion, a Motilal Oswal study said.
FIIs currently hold 23.8 per cent in BSE 200, up from 22.4 per cent in March 2013. As a proportion of free float, FII ownership of BSE 200 remains high at 48.1 per cent. In contrast, DIIs hold 11.2 per cent of BSE 200, marginally down from 11.5 per cent in March 2013.
As a proportion of free float, DII ownership of BSE 200 remains low at 22.6 per cent.
FIIs are significantly overweight in private banks, technology and NBFCs. Private banks is the most preferred sector, with $44.8 billion investment value. Private banks recorded the highest increase since March 2009 ($34.3b). DII are overweight on consumer, oil and gas, capital goods, PSU banks and metals.
According to AC Choksi Sharebrokers, over the past 12 months, FIIs consistently increased their holdings in Nestle and Britannia, while in other companies in which they were increasing their holdings till the December 2013 quarter, they have started reducing their holdings during the March 2014 quarter. DIIs consistently increased their holdings in ITC, GCPL and Dabur over the period of 12 months whereas they remained consistent sellers in Emami, Jyothy Labs, Zydus Wellness, Nestle and Britannia. This trend indicates that DIIs are selectively bullish on consumer stocks while FIIs are reducing their holdings in the sector.