Mumbai A sharp jump in block trades by private equity and venture capital investors, which began in July, is seeing a rebound in the markets amid buying from foreign institutional investors (FIIs), even as foreign investors take a bearish turn on Indian stocks. Have been
Some of the biggest block trades have taken place over the past few months as investors have taken advantage of the resurgence in the stock markets to reduce their stake in listed Indian companies.
Private equity major KKR sells 9,185 crore stake in Max Healthcare, while Blackstone sold a major stake in two of its positions- one 4,000 crore stake in auto parts maker Sona BLW Precision Forgings 2,650 crore in Embassy Office Parks. Other investors such as Temasek and TPG have also sold their stake in listed companies in recent months.
Several promoters have also put pressure on them to reduce their stake. Sold by Triveni Engineering & Industries Ltd., a promoter of Triveni Turbine Ltd. 1,609 crore stake was sold in the company to several investors last month, while Biocon Ltd. 1,220 crore stake in Syngene to raise funds.
These big trades came between FIIs buying Indian equities worth around $7.6 billion in July and August, but since the second half of September, these investors have once again become net sellers of equities. FIIs sold Indian shares worth $1.6 billion in September.
However, industry experts believe that the momentum in block trades by investors is likely to continue as cautious FII buyers are replaced by domestic institutional investors and even high-net-worth individuals. .
“We are seeing more blocks by domestic funds/HNIs as compared to FIIs. FIIs are buying very selectively,” said a Mumbai-based investment banker on condition of anonymity.
Supply for large blocks remains strong as the 12-month IPO lock-in for many companies that went public last year has ended. These investors will be looking for the right opportunities to sell their stake through block trades.
“We do not see that the FII sell-off has had much of an impact on the block deals. Even in the first six months of the year when FIIs were selling, we saw many blocks. Most of the supply is coming from financial sponsors, especially those companies where the IPO lock-in is coming to an end,” said another investment banker, who also spoke on condition of anonymity. Sectors like financial and consumer goods There are activities in the market, which he said are doing well, while technology is a difficult prospect in the current environment.
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