Large Cap Stock With High FII Holdings: Large-cap stocks are Companies with a sizeable reputation and a massive investor base. These Companies have been in the markets for decades together. They would have survived any economic adversity affecting their business, managing to stay profitable. While Some, in spite of being loss-makers can still be market leaders in their industry.
Investing in Large Caps on its own could be a sensible recipe for garnering safe returns. However, investing in Companies that already have a great interest from Foreign Investors. Now this can become a compelling opportunity for us retail investors.
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Large Cap Stocks with High FII Holdings
Today, we are going to talk about Large Cap Stocks with the highest FII holdings. We will be taking a glimpse of their business, learning who their biggest Foreign Investors are, and will understand their revenue and profitability.
Large Cap Stocks with High FII Holdings #1 – One97 Communication (PayTM)
PayTM (or Pay Through Mobile), is a name every Indian is familiar with, as the revolutionizer of the mobile banking industry in India. PayTM’s parent ‘One97 Communication’ was founded by Vijay Shekhar Sharma. This Fin-Tech Company began its journey as a prepaid mobile and DTH recharge platform however, it later ventured into multiple other financial services.
Today, the Company offers Mobile payment services to customers via UPI, Payment soundboxes, Point-of-sale machines (POS), and online payment gateway services among multiple others.
One97 Communications was listed on 18 November 2021. The issue size was the largest Initial Public Offering in India at the time. Shares of the Company touched an all-time high of Rs. 1,782 before falling to Rs. 546 by March 2022. The share price is still 46% below its listing price.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 850 | Market Cap (Cr.) | 53277 |
| EPS | -27 | Stock P/E | 0 |
| RoE (%) | -13.10% | RoCE (%) | -12.66% |
| Promoter Holding (%) | 0% | FII Holding (%) | 71.11% |
| Debt to Equity | 0.02 | Price to Book Value | 5.19 |
| Net Profit Margin (%) | -22.2% | Operating Profit Margin (%) | -26.5% |
The Company currently holds the record for the highest FII holding of 72.11% as of June 2023. Its biggest FII shareholder is Ant Financial, a subsidiary of the Chinese Conglomerate Alibaba Group.
One97’s revenue skyrocketed by 60%, growing from Rs. 5,264Cr in FY22 to 8,400Cr in FY23. The Company continues to scale its revenues at a CAGR of 62% in the past 3 years. The stock currently trades at a Price to Net Sales ratio of 6.44x.
Despite reporting high revenue growth, the Company continues to be a Loss maker. Its net Loss was reported at Rs. 1568Cr in FY23, which reduced by 9% from Rs. 1441Cr in FY22.
Large Cap Stocks with High FII Holdings #2 – Max Healthcare Institute
Max Healthcare is one of India’s largest hospital chains, with a presence in NCR Delhi, Punjab, Maharashtra, and Uttarakhand. The Company currently owns and operates 17 hospitals, with an aggregate bed capacity of over 3500+.
Max was recently acquired by Radiant Life Care Pvt Ltd, which was led by its promoter Abhay Soi. Post-acquisition, both Companies went into an amalgamation resulting in “Max Healthcare Institute” being the chosen name for the organization. The Company is currently led by Abhay Soi as its Chairman & Managing Director.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 543.25 | Market Cap (Cr.) | 54102 |
| EPS | 12.05 | Stock P/E | 46.21 |
| RoE (%) | 16.12% | RoCE (%) | 29.83% |
| Promoter Holding (%) | 24% | FII Holding (%) | 59.88% |
| Debt to Equity | 0.09 | Price to Book Value | 7.11 |
| Net Profit Margin (%) | 24.19% | Operating Profit Margin (%) | 26.90% |
Max Healthcare has the 2nd highest FII Holdings in India, at around 59.98% as of June 2023. Government of Singapore, New World Fund Inc, and Small Cap World Fund Inc are some of its biggest foreign Investors.
Max reported FY23 numbers of Rs. 4,702Cr, growing its topline by 16% from Rs. 4,058Cr in FY22. Profits grew by a massive 82% from Rs. 605Cr in FY22 to Rs. 1,103Cr in FY23. The Company has a RoE and RoCE of 16.12% and 29.83% respectively.
Large Cap Stocks with High FII Holdings #3 – Shriram Finance
Shriram Finance was established in 1979 by R. Thyagarajan, A.V.S Raja, and T. Jayaraman. This Non-Banking Financial Company (NBFC) predominantly provides Hire purchase Financing for Trucks, Passenger vehicles, and other commercial vehicles.
Shriram City Union Finance Limited (SCUF), Shriram Capital Limited (SCL), and Shriram Transport Finance Company Limited (STFC), all three entities amalgamated to form Shriram Finance Ltd.
Today, it is one of India’s largest retail NBFCs with 1.85LakhCr worth of Assets under Management, with a vast customer base of 73.24 Lakh individuals. It operates with around 2922 branches spread across the country, run by 64,052 employees.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 1890.95 | Market Cap (Cr.) | 71329 |
| EPS | 159.69 | Stock P/E | 12.15 |
| RoE (%) | 14.84% | RoA (%) | 2.89% |
| Promoter Holding (%) | 25% | FII Holding (%) | 55.36% |
| Net Interest Margins (%) | 8% | Price to Book Value | 1.58 |
| Net Profit Margin (%) | 20.06% | Operating Profit Margin (%) | 71.46% |
52.11% of Shriram Finance is held by Foreign Institutional Investors. Some of which are the Government of Singapore, Government Pension Fund Global, and JP Morgan Funds hold substantial interests in the Company.
Shriram Finance’s Interest Income of Shriram Finance Ltd increased by 62% from Rs. 18,646Cr in FY22 to Rs. 29,206Cr in FY23. Net Profit Increased at an even greater rate, from Rs. 2,721 in FY22 to Rs. 6,020Cr, a solid growth of 107%.
As of FY23, the Company reported Net Interest Margins of 8.37% and Return on Assets of 2.89%. The stock currently trades at a PE ratio of 12.27x with a Price-Book Value of 1.6x.
Large Cap Stocks with High FII Holdings #4 – Zomato
Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato began its journey as a restaurant listing and review portal. What started as a food review business, has scaled into become an absolute giant in the Food delivery business. The food delivery segment received orders of 64Cr in volume and saw a 21% growth from the previous year.
Zomato also runs Hyperpure, which is a Business-to-Business segment. Hyperpure sources groceries from farmers and sells them to restaurants that are already a part of Zomato. This segment recorded revenues to the tune of Rs. 1,500Cr.
Zomato also operates a Quick Commerce store under the name Blinkit. Blinkit was acquired in August 2020. The business delivers everyday products to customers within minutes. This business saw orders reaching 11.9Cr as of FY23.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 99.9 | Market Cap (Cr.) | 85356 |
| EPS | -1.2 | Stock P/E | 0 |
| RoE (%) | -5.79% | RoCE (%) | -5.37% |
| Promoter Holding (%) | 0% | FII Holding (%) | 35.64% |
| Debt to Equity | 0 | Price to Book Value | 4.69 |
| Net Profit Margin (%) | -13.72% | Operating Profit Margin (%) | -17.71% |
54.42% of the Company’s shares are currently held by FIIs, making it the 4th Large Cap with the highest FII holding. Alipay and AntFin Singapore are some of the prominent holders with 3.45% and 6.41% stakes respectively.
Zomato in the recent past has been scaling up revenue at the rate of 91% CAGR, in the past 3 Years. It reported an FY23 figure of Rs. 7760Cr which scaled up by 66% from Rs. 4687Cr in FY22.
At the same time, it has also managed to reduce losses by 21%, from Rs. 1,222Cr in FY22 to 971Cr in FY23. The Company however trades at expensive valuations of 11x its Revenue.
Large Cap Stocks with High FII Holdings #5 – Axis Bank
Axis Bank is the third largest Bank in India, with deposits worth Rs. 9.46Lakh Cr as of FY23. The bank currently has about 4,900 branches spread across the country and has operations in Singapore, Dubai, and London among other major global cities.
The Bank was promoted by Unit Trust of India (UTI), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and National Insurance Company (NIC). It first started its operations in 1994.
As of June 2023, 52% of shares of Axis Bank are held by Foreign Institutional Investors, with Dodge and Cox International fund and the Government of Singapore being few of those investors.
| Particulars | Amount | Particulars | Amount |
|---|---|---|---|
| CMP | 1018.25 | Market Cap (Cr.) | 312770 |
| EPS | 40.66 | Stock P/E | 24.93 |
| RoE (%) | 18.84% | RoA (%) | 1.82% |
| Promoter Holding (%) | 8% | FII Holding (%) | 52.00% |
| Net Interest Margins (%) | 4.02% | Price to Book Value | 2.3 |
| Net Profit Margin (%) | 10.22% | Operating Profit Margin (%) | 17.54% |
Axis Bank’s deposits have been growing 15% CAGR in the past 4 years, increasing from Rs. 5,39,287 Cr in FY19 to Rs. 9,46,945Cr in FY23. Advances have also maintained a 15% CAGR pace over the 4 years, from Rs. 4,85,613Cr in FY19 to Rs. 8,45,303Cr in FY23.
Axis reported FY23 Net Interest Margins of 4.02%, which rose by 55bps from 3.47% in FY22. The Bank earns 64% from Interest it charges on advances, 18% from its other investments & 14% from Commission or brokerage.
The Bank’s Net Interest Income rose from Rs. 68,846Cr in FY22 to Rs. 87.448Cr in FY23, growing by 27% in a year. At the same time, Net Profits of the Company fell by 23%, from 14,207Cr to 10,918Cr in FY23.
List of Large Cap Stocks with High FII Holdings
The list below puts together 10 Large Cap stocks with the Highest FII Holding in India.
| Stock Name | CMP | Mkt Cap | FII Holding |
|---|---|---|---|
| One97 Communications | 851.7 | 54119 | 72% |
| Max Healthcare Institute | 558.65 | 53898 | 60% |
| Shriram Finance | 1905.1 | 71912 | 55% |
| Zomato | 99.8 | 86010 | 54% |
| Axis Bank | 1019.25 | 316560 | 52% |
| Apollo Hospitals | 5031.65 | 71932 | 48% |
| ICICI Bank | 964.85 | 691165 | 45% |
| ITC | 446.25 | 564932 | 44% |
| Indusind Bank | 1412.65 | 111934 | 42% |
| AU Small Finance Bank | 742.65 | 50440 | 42% |
Conclusion
After reviewing these Companies, we realize that foreign investors have shown interest in the most lucrative opportunities. They do not mind investing in Companies that are yet to turn a profit, provided they continue to expand their market share.
However, we cannot blindly invest in these Companies just because they have FII holdings. In Addition, one must do a much deeper fundamental analysis and understand why this Company has good potential in the future.
Which of these companies happens to be your favorite stock on this list? Would you like us to do a much deeper Fundamental Analysis on any of these stocks? Do let us know in the comments.
Written By Nasir Hussain
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