Paytm, Cartrade, Delhivery: FIIs hold over 50% stake in these 10 companies; should you buy?

Foreign institutional investors (FIIs), which are widely followed by investing community, look bullish on select new-age firms, NBFCs, banks and healthcare firms. Data showed they held over 50 per cent stake in at least 10 companies as on March 31, 2023.

With a holding of 71.83 per cent in One 97 Communications (parent company of Paytm), FIIs held the maximum stake in the fintech platform as of March 31, 2023. FIIs also had 69.94 per cent and 67.63 per cent stake in CarTrade Tech and Delhivery, respectively.

Paytm on May 5 reported a 51 per cent rise in revenue from operations at Rs 2,334 crore in Q4FY23 on an annual basis. The company brought down its net loss in the March quarter to Rs 168 crore from Rs 761 crore a year ago, and Rs 392 crore in Q3FY23. Paytm said its revenue growth was led by an increase in gross merchandise value (GMV), higher merchant subscription revenues, and growth of loans distributed through the company’s platform.

Global brokerage firm Citi said Paytm has several profitability tailwinds. It said digital payments continue to see robust growth, adding that there is significant headroom for increase in penetration of lending products into existing consumers.

“We expect adjusted Ebitda/Ebit margins to expand from 5 per cent/minus 3 per cent in 4QFY23 to 13 per cent/9 per cent by FY26E on top line growth at 20 per cent CAGR over FY23-26E. The CMP implies 22 times FY26E EV/adjusted Ebitda,” it said while upping its price target on the stock to Rs 1,144 from Rs 1,103. Shares of Paytm traded nearly 5 per cent higher at Rs 723.75 at around 12.05 pm (IST).

Housing Development Finance Corporation (HDFC) is next is the list. FIIs held a 66.20 per cent stake in the mortgage lender as on March 31, according to primeinfobase.com. It was followed by 360 One Wam (63.31 per cent), Redington (60.50 per cent), ICICI Bank (54.95 per cent) and Zomato (54.61 per cent).

Phillip Capital maintained a ‘Buy’ call on HDFC with a target price of Rs 3,200. “Individual home loan segment has witnessed continued growth (in Q4) owing to continued demand in the high ticket segment, stability in the job market and resilient domestic economy. We believe that HDFC’s superior know-how of the segment, strict underwriting practices and buffer provision will keep credit loss low. With the announcement of the merger with HDFC Bank, the stock performance of the company is pegged to HDFC Bank’s performance and outlook. We are constructive on HDFC Bank and accordingly maintain our positive stance on HDFC as well,” the brokerage said.

HDFC last week posted around 20 per cent year-on-year (YoY) rise in standalone net profit at Rs 4,425.50 crore for the quarter ended March 2023.

Global investors also had over 50 per cent holding in Max Healthcare Institute and PB Fintech as on March 31, 2023. Overall, FIIs raised their stake in 609 companies during the March quarter, while they reduced their holdings in 714 firms. Meanwhile, they offloaded shares worth Rs 26,210 crore in the domestic equity market in Q4FY23 when the benchmark BSE Sensex declined 3 per cent.

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