Telecom Shares Witness Record Monthly Foreign Inflows In March

Shares of telecommunication companies reported their highest monthly investments from foreign portfolio investors in March, according to data provided by National Securities Depository Ltd.

The month saw a large block deal of nearly $700 million in shares of telecom operator Bharti Airtel Ltd., when a US-based investment firm GQG Partners bought a bulk of shares from the company's Singapore-based promoter, Pastel Ltd.

Overseas investors pumped in $960 million in the telecom sector last month. That's the highest monthly inflows that the sector has witnessed since March 2012­­—when the Securities and Exchange Board of India and NSDL started recording the data of sectorwise inflows and outflows from FPIs, according to data compiled by NDTV Profit from the markets regulator and depository firm.

This comes amid the S&P BSE Telecommunication rising 1.8% during March, compared with a 1.5% gain in the country's benchmark Sensex.

To be sure, details of foreign investments and divestitures for individual shares were not available immediately. However, it was noted that on March 7, the company's Singapore-based promoter Singtel—through its subsidiary Pastel—sold 4.90 crore shares (or 0.81%), while GQG Partners, through its affiliates, bought 4.34 crore shares (or 0.69%) at Rs 1,193.7 apiece.

Besides, in the FMCG space, British American Tobacco, the largest public shareholder of ITC Ltd., sold 3.5% stake in an open market transaction on March 13. The shares were mopped up by both domestic and international investors, including Government of Singapore, BofA Securities Ltd. and Societe Generale, among others.

Separately, in the technology space, foreign investors also participated in the share sale of Tata Consultancy Services Ltd. by Tata Sons on March 19.

International investors had funnelled in $4.2 billion into Indian equities in March.

FPI holdings in the Indian market dropped to a decadal low of 16.6% in 2023, largely due to a selloff triggered by portfolio underperformance and a spike in U.S. bond yields, according to Alchemy Capital Management's Head Quant and Portfolio Manager Alok Agarwal.

Despite the drop, FPI inflows in FY24 remained robust, indicating continued foreign investor confidence in the Indian market, Agarwal said in a text message response to NDTV Profit.

Emergence of retail investors in the Indian stock market has also played a crucial role in counterbalancing the impact of FPI outflows, with domestic mutual funds and direct retail investors significantly increasing their free float ownership of NSE listed companies, thereby reducing the influence of FPI flows, Agarwal said.

"We expect FPI flows to remain strong and would expect them to resume increasing their stake in Indian markets."

Following the telecom sector, shares of fast-moving consumer goods witnessed the second-highest foreign portfolio investments in March, according to NSDL data.

Resilience of Indian stock market and improving macros of the Indian economy forced FPIs to turn buyers in India. FPIs were big buyers in capital goods, automobiles, financials, telecom and real estate, according to VK Vijayakumar, chief investment strategist, Geojit Financial Services Ltd.

What Foreign Investors Sold In March

Oil and gas shares witnessed the highest outflows from foreign portfolio investors in March, who offloaded $274 million worth of shares in the sector, according to NSDL data.

The sector was followed by information technology and consumer durables, which witnessed outflows from FPIs worth $200 million and $161 million, respectively.