In the latest declared shareholding pattern by ICICI Bank and Axis Bank for the December 2021 quarter, it was seen that Foreign Portfolio Investors (FPIs) or Foreign Institutional Investors (FIIs) has done profit-booking, what are the reasons behind this reduction in stake of FIIs in ICICI & Axis Bank, let’s talk more about the same in this article as we move ahead.
1) ICICI Bank:
- In ICICI Bank, FIIs have decreased their shareholdings by around 2% from 47.3% in September 2021 to 45.3% in the quarter ended 31st December 2021.
- Meanwhile, Domestic Institutional Investors (DIIs) have increased their stake from 42.7% in September 2021 to around 44% in December 2021.
- DIIs have increased their shareholding mainly because of a huge inflow of funds in DIIs products like Mutual Funds (MFs), insurance, etc.
2) Axis Bank:
- In Axis Bank, there has been a drastic change in the FIIs holding from 54% in September 2021 quarter to 47% in the quarter ended 31st December 2021 amounting to decreased in shareholding of FIIs straightly by 7%.
Reasons behind withdrawal by FPIs/FIIs:
- FPIs or FIIs are taking out their investment or in other sense doing profit booking on the grounds of rising interest rates scenario. Also, the other asset classes especially the bond for instance US 10-Year G-Sec Yield are looking more lucrative for investments as compared to the equity asset class.
What Should Investors Do?
Due to the development of other asset classes against the equity, there might be some volatility in the equity asset class. Also, due to the same reasons, the stocks which have received premium or overvaluation might suffer rationalization in the calendar year 2022. Hence one should not follow the lumpsum manner of investing and should follow a staggered way of investing.
Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent are commendation to buy or sell stocks or MF.