In 2023, Foreign institutional investors have been drawn to the Indian stock market with the NIFTY 50 and the BSE Sensex reaching all-time highs. The remarkable rally in the Indian stock market continued in August, driven by strong earnings of the companies.
FII buying in the Indian stock market has substantially increased in the past three to four months, which has resulted as one of the key reasons for the recent market rally.
Foreign institutional investors have invested Rs 1,55,029 crores since January. FIIs were net buyers of capital goods, power, and healthcare equities, according to NSDL data (August 1st-15th).
Here are the three industries in which FIIs increased their stake in August.
Capital Goods
India’s Capital Goods industry serves as a strong base for its engagement across sectors such as Engineering, Construction, Infrastructure, and Consumer goods, amongst others.
Capital goods have become another favorite sector for FIIs, as it has seen consistent inflows over the last six months. On a year-to-date basis, the S&P BSE Capital Goods Index has risen 31 percent.
Capital Goods has a market size of $43.2 billion in India. The capital goods industry is divided into ten sub-sectors, with electrical equipment being the largest, followed by plant equipment and earthmoving/mining machinery, with capital goods output estimated to reach $112 billion by 2025.
The Capital Goods sector saw higher net inflows of Foreign funds of Rs 2,453 crore in the first of August,2023 compared to July. A significant portion of this flow has gone to aerospace and defence stocks.
Here are the top stocks in this particular sector: ABB India, Bharat Forge, Hindustan Aeronautics Limited, and Bharat Electronics.
Power Sector
The Indian government plans to use renewable energy sources with the goal of achieving net zero emissions by 2070. Furthermore, the Ministry of Power estimates that by 2030, the country will be able to cover 62 percent of its energy needs using 500 GW of non-fossil fuel sources.
According to the National Investment Promotion and Facilitation Agency, The share of non-fossil fuel capacity is expected to rise from 42% to more than 64% by 2029-30.
FII capital inflows into the Power sector were Rs 2,181 crores in the first half of August. The S&P BSE Power Index has returned 33 percent over the previous six months.
Here are the major stocks in this sector: NHPC, Torrent Power, Inox Wind Energy Ltd, Power Grid Corporation of India Ltd, and Adani Green Energy Ltd
Healthcare
As a result of COVID-19, healthcare and associated industries have risen to the top of governments’ priority lists, becoming one of India’s major sectors. Both financially and in terms of employment. The Indian healthcare system is expanding rapidly as a result of improved coverage, expanded services, and increased spending by both public and private entities.
India has the potential to generate a staggering $774 billion in revenue in the healthcare sector by 2030, with revenue predicted to rise at a 10.36 percent annual rate (CAGR 2023-2027).
FII capital inflows into the Healthcare sector were Rs 1,030 crores in the first half of August.
Sun Pharmaceutical, Cipla, Dr. Reddy’s Labs, Divi’s Labs, Apollo Hospitals, and Mankind Pharma are the prominent stocks in the pharmaceutical sector.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
