Foreign portfolio investors (FPIs) leaned into India’s equity markets with a sharper eye for selective plays in the final quarter of FY25, showing bullish conviction despite heightened market volatility.
A Mint analysis of FPI shareholding in 1,168 stocks that are part of BSE’s large-, mid- and small-cap indices reveals a strong tilt toward four small-cap firms and a bold bet on India’s fifth-largest private lender, which has been embroiled in regulatory and financial turbulence.
Crisis as opportunity
IndusInd Bank finds itself in leadership limbo after the recent exits of chief executive officer Sumant Kathpalia and deputy CEO Arun Khurana. The exits follow earlier revelations of $175 million in misreported derivative trades in March, equating to approximately 2.35% of its net worth. Despite the turmoil, foreign investors have doubled down, sequentially increasing their stakes by 5.24 percentage points to 28.15% in Q4FY25.
The bank’s stock witnessed extreme volatility, nosediving over 27% in a single trading session on 11 March 2025 when the irregularities came to light, before staging a 27% recovery as FPIs moved in. While the bank has engaged EY and PwC for forensic audits, analyst sentiment remains cautious but optimistic, with 82% maintaining ‘buy’ or ‘hold’ recommendations on the stock, according to Bloomberg data.
“The FPI accumulation shows conviction in the bank’s fundamentals,” said Harshal Dasani of INVasset PMS, noting RBI’s reassurance of financial stability helped restore confidence. With the CEO position still vacant and corrective measures underway, investors are betting on the bank’s medium-term recovery in India’s growing financial sector.
“Global funds are playing the medium-term story. They view the irregularities as one-off, not structural,” he said.
Small-cap stars draw global backing
Beyond the banking drama, FPIs aggressively built positions in four nimble, high-growth small-cap names across sectors.
360 One Wam, a top-tier wealth and alternate asset manager, saw the steepest rise. FPIs stake jumped by 11.11 percentage points to 32.95%. While the stock dipped 25% during the quarter, the company reported a 35% rise in FY25 revenue to ₹2,652 crore, driven by recurring asset management income and strategic partnerships, including one with UBS.
“This year was transformational,” said CEO Karan Bhagat. “Our platform strength and client trust position us well despite global uncertainty.” All 12 Bloomberg-tracked analysts remain bullish on this stock.
CarTrade Tech followed with an 8.6 percentage point rise in these overseas investors’ stake to 51.74%. The auto retail and remarketing firm posted stellar FY25 numbers: revenue hit ₹711 crore and net profit soared 627% to ₹145 crore, aided by strong OLX India integration and improved operating leverage. The stock gained around 11% during Q4.
They also lapped up shares of Aptus Value Housing Finance which is focused on affordable home lending. The company witnessed a 5.9 percentage point jump in FPIs stake. Their asset under management (AUM) grew 25% to ₹10,865 crore, while net profit increased 23% to ₹751 crore. The stock was up a modest 2% for the quarter.
Yasho Industries, a chemicals player, saw foreign holdings rise from 1.4% to 7.2%. Despite a 13% decline in its stock prices and a profit drop to ₹611 crore in FY25, revenue volumes and margins improved. The company plans to expand capacity and expects 40–50% revenue growth in FY26.
Hitting the exit button
Overseas investors also made significant exits from several counters in Q4FY25, with real estate player Embassy Developments seeing the sharpest FPI outflow (-11.3 percentage points). Staffing firm TeamLease Services and India Cements followed with 10.9 and 9.6 percentage point stake reductions, respectively, followed by their shares plunging by 38% and 27% during the period.
In a curious divergence, Avanti Feeds witnessed an 810 basis points reduction despite its stock surging 34%, suggesting profit-taking after strong gains. Healthcare provider Yatharth Hospital also saw nearly half its FPI ownership evaporate, declining from 9.8% in December to 4.5% in March (533 basis points fall) alongside a 25% price decline.
This is the seventh part of a series of data stories on the latest shareholding pattern. Read previous parts of our shareholding series here.
