In the 2019 Union Budget, finance minister
Nirmala Sitharaman announced a slew of measures that didn't sit well with the markets. Increase in the surcharge for foreign and domestic investors received the most criticism. Post that announcement, foreign portfolio investors (FPIs) have withdrawn around Rs 24,500 crore from domestic equities in July and August.
To revive the weakening economy and bring back foreign investment, the finance minister on Friday, announced a rollback of the surcharge on the FPIs, a move that was cheered by the Indian markets despite global headwinds.
According to Vinod Nair of Geojit Financial Service, this may reverse the FPI selling and restore some confidence in the Indian markets.
Also read: Why brokerages believe government measures will only provide short-term boost
We took a look at top 10 stocks with most foreign investor holding and their performance since Budget as well as post the FPI surcharge rollback. These 10 stocks include HDFC with a 74.7 percent FPI holding, followed by Shriram Transport (57.7 percent), ICICI Bank (56.80 percent), IndusInd Bank (56.70 percent), Indiabulls Housing (52,7 percent), UPL (51.20 percent), Just Dial (51.10 percent), Infosys (50.80 percent), HDFC Bank (50.20 percent), and Axis Bank (49.60 percent).
Most stocks with the highest foreign investor holding gained during the day post the rollback. In intra-day deals, Indiabulls Housing rose 8.3 percent, while Shriram Transport Finance and HDFC were up 5 percent and 4.3 percent, respectively. Meanwhile, ICICI Bank, IndusInd Bank, HDFC Bank, UPL, and Axis Bank gained between 2-3 percent each. Infosys was the only stock with higher FPI holding trading nearly 2 percent lower.
However, since the Budget, these stocks have fallen up to 35 percent. Indiabulls Housing stock tanked the most, down 35.6 percent since July 5, the day of the Budget, followed by UPL and Axis Bank, which fell 17.8 percent and 17.6 percent, respectively. IndusInd Bank, HDFC Bank, Just Dial, HDFC, ICICI Bank, and Shriram Transport shed between 6-14 percent. However, Infosys was the only stock in the group which rose nearly 12 percent since Budget.
Going ahead, brokerage Prabhudas Lilladher recommends investors to use these turbulent times to build a portfolio of companies with moats in their business and ability to withstand technology disruptions. Maruti, Ashok Leyland, L&T, Siemens, HDFC Bank, Cholamandalam Finance are likely to be direct benefices of the same, the brokerage said.
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