Foreign investors have continued trimming their stakes in defensive sectors such as energy and consumer staples, while boosting exposure to cyclical and growth-driven segments including transportation, telecom, and healthcare, according to a report by Elara Securities.
The report noted that “FII ownership continues to moderate for most sectors, reflecting a cautious stance.” It attributed this to global market volatility and profit-booking following sustained inflows in previous quarters.
Sectors like Energy (-9.3% YoY), Utilities (-10.1%), and Consumer Staples (-7.3%) saw reduced foreign interest, indicating a rotation away from defensive and high-valuation plays. Conversely, FIIs raised their holdings year-on-year in Industrials (+3.9%), Health Care (+12.9%), Information Technology (+7.9%), Materials (+7.6%), Media (+17.1%), Telecom (+14.4%), and Transportation (+16.2%), signaling a strategic tilt towards areas with stronger earnings outlooks and growth potential.
Meanwhile, domestic institutional investors (DIIs) maintained their counter-cyclical buying approach, increasing exposure across several sectors. Consumer Discretionary (+26.4% YoY), Telecom (+5.5%), and Financials (+12.4%) recorded significant DII accumulation, reflecting local investor confidence in India’s consumption and credit growth narrative.
However, some weakness persisted in Media (-16.6%) and Utilities (-11%), consistent with limited earnings visibility.
The report also highlighted mixed trends in public shareholding. Retail participation surged in Media (+19.6% YoY) and Real Estate (+19.7% YoY), driven by optimism in the midcap space. In contrast, it declined in Telecom (-18.9%), Auto (-7.8%), and Materials (-10.7%), suggesting selective rotation among retail investors.
Overall, Elara Securities observed that the combined ownership trends indicate a stable promoter base, rising domestic institutional dominance, and rotational retail behaviour—creating a more diversified and balanced market ownership structure across sectors.
