3 ‘Largest Bets’ of FIIs in Mid-cap Space!

Looking for the holdings of institutional investors in a company is always a good idea and increases confidence in the decision-making process. While searching for midcaps with the highest FII holdings, as per the latest shareholding pattern, I came across surprising names. All these companies are new-age loss-making businesses with relatively recent debuts on the Indian bourses.

In fact, these are not just the top scorers in the list of FII’s favorite midcaps, but each one of them has over a massive 50% FII stake! Here are these 3 companies.

One 97 Communications Limited

One 97 Communications Ltd (NS: PAYT ), or more commonly known as Paytm is an INR 54,063 crores big fintech company that enables digital payments, and recently entered into the stock broking and loan distribution businesses. Firstly, just like many new-age businesses, this is a loss-making company, with a net loss of INR 1,775.9 crores in FY23, over revenue of INR 8,400 crores.

Still, FIIs are showing huge confidence in Paytm due to many growth factors such as more NBFC and bank partnerships will likely expand the opportunity to distribute loans through the Paytm platform. These FIIs hold a gigantic stake of 71.83% which is the highest among all mid-cap counters.

Delhivery Limited

Delhivery Ltd (NS: DELH ) is also a new-age business that is primarily a tech-enabled supply chain and logistics company, having a market capitalization of INR 27,909 crores. It has never reported a single profitable year yet and declared a net loss of INR 1,007.78 crores in FY23 over revenue of INR 7,543.82 crores.

However, the company is expanding rapidly and its current pin-code reach has soared to 18,510, from 13,485 in FY19. From operation in 42 countries 4 years back, the company now operates in 220+ countries. Although FIIs have cut down their stake for two consecutive quarters, they still hold a mammoth stake of 67.62%.

PB Fintech Limited

PB Fintech Ltd (NS: PBFI ), more commonly known as Policy Bazar is an online marketplace for insurance and other lending products, having a market capitalization of INR 31,989 crores. The company has been consecutively reporting losses after FY17 with a net loss of INR 487.21 crores in FY23, over revenue of INR 2,816.84 crores.

The good thing is, PB Fintech has been increasing its revenue at a 5-year CAGR of 63.4% which is no less than impressive. The stock also seems to have bottomed out and is now recovering amid post-IPO losses. From the December 2022 quarter’s stake of 47.99%, FIIs now hold 50.41% of the company, by March 2023, making it their third-largest bet in the mid-cap space.