FIIs Selectively Buy Indian Stocks Amid DII & Retail Selling Spree

Summary: In the September quarter, a notable shift in investor behavior was observed in the Indian stock market. Foreign Institutional Investors (FIIs) turned net buyers in specific mid and large-cap companies, including Shaily Engineering Plastics, Graphite India, and Avenue Supermarts. This is happening even as Domestic Institutional Investors (DIIs) and retail shareholders were seen paring their stakes. This divergence is significant as FIIs' overall stake in Indian equities has fallen to a 13-year low of 16.7%, while DII holdings have reached a record high of 18.3%.

Stock-Specific Insights: * **Shaily Engineering Plastics:** FII holdings increased from 9.71% to 11.30%. The company is a key supplier for GLP-1 medications, with healthcare expected to drive significant revenue growth. Commercial supplies for GLP-1 pens are slated for FY26, with expansion plans to meet anticipated demand. * **Graphite India:** FII holdings rose from 4.99% to 6.6%. The company is expanding its graphite electrode capacity and diversifying into advanced materials like graphene and battery chemistries, positioning itself for sustainable steelmaking and defense sectors. * **Avenue Supermarts (DMart):** FIIs increased their stake from 8.25% to 8.73%. Despite slowing sales growth and margin pressure due to shifting consumer preferences and competition, DMart continues its expansion and plans to enhance its online presence.

Impact: This selective buying by FIIs into specific companies, despite overall caution, indicates confidence in the growth prospects of these particular firms and sectors. It suggests that foreign investors are identifying pockets of opportunity driven by strong business fundamentals, expansion plans, and sectoral tailwinds, even as they remain wary of broader emerging market flows due to global monetary tightening. For Indian investors, this highlights the importance of understanding the distinct strategies of different investor classes and focusing on companies with strong underlying business drivers. Impact Rating: 7/10

Definitions: * **FIIs (Foreign Institutional Investors):** Overseas entities that invest in a country's financial markets. * **DIIs (Domestic Institutional Investors):** Indian entities like mutual funds, insurance companies, and pension funds that invest in domestic markets. * **Retail Shareholders:** Individual investors who buy and sell stocks. * **Mid-cap/Large-cap:** Categories of companies based on their total market value, with large-caps being bigger than mid-caps. * **GLP-1 (Glucagon-like peptide-1):** A hormone and a class of drugs used for managing diabetes and weight loss, for which Shaily Engineering Plastics supplies delivery devices. * **CAGR (Compound Annual Growth Rate):** The average annual rate of growth of an investment over a specified period longer than one year. * **Basis Points (bps):** A unit equal to 1/100th of a percent; 100 basis points equal 1 percent. * **PAT (Profit After Tax):** The net profit of a company after deducting all expenses, interest, and taxes. * **TPA (Tonnes Per Annum):** A unit measuring production capacity, referring to the amount of a substance produced per year. * **FMCG (Fast-Moving Consumer Goods):** Everyday items sold quickly and at a relatively low cost, such as packaged foods, toiletries, and beverages. * **Quick Commerce:** A fast delivery service, typically for groceries and everyday items, aiming for delivery within minutes.