Relentless selling by foreign institutional investors (FIIs) has weighed heavily on Indian equities over the past year, but a handful of smallcap stocks have bucked the trend, witnessing increased foreign investor interest despite the broader selloff.
In the last one year, FIIs have sold equities worth Rs 2.6 lakh crore. Despite the heavy outflows, FIIs increased their holdings in five smallcap companies over the past year, signalling selective conviction in specific businesses and sectors.
Among the names where foreign ownership rose sharply is Artemis Medicare Services, a multi-specialty tertiary care hospital based in Gurgaon. FII holding in the company increased from 0.6% in December 2024 to 12.5% in December 2025, even as the stock declined 13% over the past year.
FIIs also raised their stake in Knowledge Marine & Engineering Works from 0.8% to 11% during the same period. The stock has been a strong performer, gaining 84% in the last one year.
Another stock that saw increased FII interest is Utkarsh Small Finance Bank, where foreign holding rose from 1.3% to 11.8%. The bank focuses on collateral-free, small-ticket loans, particularly to women borrowers. However, the stock has fallen 44% over the past year.
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In the case of GRM Overseas, FII holding increased from 0.2% to 9.5%. The company is engaged in milling, processing and marketing branded and non-branded basmati rice, and its stock has gained 64% over the past year.
Similarly, FIIs increased their stake in Zota Health Care from 0.2% to 8.1%. The company manufactures, markets and exports pharmaceutical products, and its stock has risen 31% in the last one year.
The data shows that even as foreign investors pulled large amounts of money out of Indian markets, they continued to selectively accumulate stocks in sectors such as healthcare, marine infrastructure, financial services, food exports and pharmaceuticals. This suggests that FIIs are not exiting India entirely but are instead becoming more selective, focusing on niche businesses and companies where they see long-term growth potential.
The recent market correction has also been particularly sharp, with foreign portfolio investors (FPIs) remaining net sellers for 16 consecutive sessions, offloading shares worth Rs 1 lakh crore between February 25 and March 20. During this period, the Nifty 50 and BSE Sensex declined 9% and 9.5%, respectively, although consistent buying by domestic institutional investors helped cushion the fall.
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