What FIIs bought and sold in India in March 2022?

Amidst this chaos, the US Fed raised Fed rates by 25 bps in March with a promise to raise rates in each of the remaining 6 FOMC meetings in 2022. FPIs were also intimidated by the fact that the US planned to seriously start unwinding its $9 trillion bond book from May-22.

In these conditions, aggressive FPI selling was inevitable. In Jan-22, FPIs sold $4.46 billion of equities and $4.71 billion in Feb-22. In Mar-22, FPIs sold another $5.38 billion of equities. FPIs have already sold over $14.50 billion in Indian equities in first 3 months of 2022. In Mar-22, entire selling by FPIs happened in the first half, with token buying seen in second half.

That is hardly surprising because towards the end of the fiscal year; domestic investors and FPIs protect portfolio values by avoiding aggressive selling on index heavyweights. In Mar-22, the FPIs sold $5.43 billion in the first half, but bought equities in second half of Mar-22. Here is the breakup of Assets Under Custody (AUC) of FPIs at the close of Mar-22.

How FPI AUC sectoral mix changed in Mar-22

The table above covers the top 16 sectors where AUC is more than $10 billion. Out of 40 sectors that FPIs invest in, AUC of the top-16 sectors accounted for 91.95% of the total FPI AUC of $618.74 billion. The Mar-22 AUC at $618.74 billion is up 2.54% over Feb-22 AUC and this was largely driven by IT, metals and oil & gas sectors.

Financials, comprising banks, NBFCs and insurance accounted for 31.19% of FPI AUC, which approximately corresponds to the weightage of financials in the Nifty index. The other significant AUC contributors are IT at $91 billion, Oil & Gas $70.33 billion, FMCG $34.41 billion, Healthcare $28.91 billion, utilities $27.48 billion and automobiles $24.17 billion. The AUC depletion was most prominent in banks and to a lesser extent in automobiles.

Unlike the previous two months, IT did not come under as much pressure. As a result IT managed to improve its AUC during the month. Even oil & gas saw accretion in AUC during the month as heavyweights like ONGC and Reliance added heft in the second half of the month. Of course, banks saw depletion of AUC but that is hardly surprising considering the aggressive selling by the FPIs and the hawkish sentiments of the US Federal Reserve. Among the smaller sectors, metals and utilities saw an expansion in AUC and better AUC rankings.

Sectors where FPIs bought into in Mar-22

FPIs sold $5.38 billion in Indian equities in Mar-22. This takes the total FPI selling in last 3 months to $14.50 billion and over $20 billion in the last 6 months. Obviously, sectors witnessing buying would be limited, but there were still some sectors that got the FPIs interested during March 2022.