5 Bank Stocks Where FIIs Increased Their Stake by Up to 8% in Q3 – Add Them to Your Watchlist
5 Bank Stocks: When Foreign Institutional Investors (FIIs) raise their stake in a stock, it often signals confidence in the company’s growth potential and financial health. In the banking sector, FII investments can drive positive sentiment, improve stock liquidity, and attract domestic investors.
5 bank stocks where FIIs increased their holdings by up to 8% in Q3 FY25:
1. IDFC First Bank Limited
- Market Cap: ₹46,596.44 crores
- Current Stock Price: ₹63.65
- FII Holding Increase: From 19.57% in Q2 FY24 to 27.12% in Q3 FY25 (+7.55%)
IDFC First Bank saw the highest FII stake increase among these five banks, with investors raising their holding by 7.55% in the December 2024 quarter. Despite this, the bank reported a 53.55% decline in net profit, falling from ₹732 crore in Q2 FY24 to ₹340 crore in Q3 FY25. However, its net interest income (NII) grew by 23.61%, from ₹3,592 crore to ₹4,440 crore.
IDFC First Bank is known for its strong retail banking focus, ethical banking initiatives, and digital transformation strategies.
2. Dhanlaxmi Bank Limited
- Market Cap: ₹1,071.61 crores
- Current Stock Price: ₹27.15
- FII Holding Increase: From 4.97% in Q2 FY24 to 6.95% in Q3 FY25 (+1.98%)
Dhanlaxmi Bank’s stock hit a 5% upper circuit, reflecting strong investor interest. FIIs increased their stake by 1.98% in Q3, likely due to the bank’s improving financial performance.
The bank’s net profit grew by 13.04%, from ₹23 crore in Q2 FY24 to ₹26 crore in Q3 FY25. Its NII increased by 8.22%, from ₹183 crore to ₹208 crore. Dhanlaxmi Bank has been strengthening its retail and corporate banking services, making it an attractive bet for long-term investors.
3. City Union Bank Limited
- Market Cap: ₹13,282.17 crores
- Current Stock Price: ₹179.25
- FII Holding Increase: From 26.01% in Q2 FY24 to 27.44% in Q3 FY25 (+1.43%)
City Union Bank has a strong presence in South India, catering to small businesses and retail customers. FIIs increased their stake by 1.43% in the latest quarter, possibly due to the bank’s stable financials.
The net profit surged by 13.04%, from ₹253 crore in Q2 FY24 to ₹286 crore in Q3 FY25. The NII grew by 10%, from ₹810 crore to ₹891 crore. Despite a minor dip in share price recently, the bank’s steady growth makes it a watchlist-worthy pick.
4. HDFC Bank Limited
- Market Cap: ₹13,23,484.04 crores
- Current Stock Price: ₹1,730
- FII Holding Increase: From 48.02% in Q2 FY24 to 49.21% in Q3 FY25 (+1.19%)
HDFC Bank remains a favorite among institutional investors, with FIIs increasing their stake by 1.19% in Q3. The bank’s NII increased by 8.49%, from ₹43,242 crore to ₹46,914 crore.
Despite this, net profit growth was only 3.51%, rising from ₹17,718 crore to ₹18,340 crore. HDFC Bank’s leadership in the Indian banking sector, diversified revenue streams, and consistent financial performance make it a strong long-term investment.
5. Karnataka Bank Limited
- Market Cap: ₹6,868.56 crores
- Current Stock Price: ₹181.75
- FII Holding Increase: From 10.29% in Q2 FY24 to 11.22% in Q3 FY25 (+0.93%)
Karnataka Bank is another regional bank that caught the attention of FIIs, with a 0.93% increase in stake during Q3 FY25. The bank’s NII surged by 12.84%, from ₹1,285 crore to ₹1,450 crore.
However, its net profit declined by 14.20%, indicating some short-term challenges. With a strong network of over 900 branches, Karnataka Bank remains an important player in India’s banking sector.
Financial Performance Overview
| Bank Name | Market Cap (₹ Cr) | Stock Price (₹) | FII Increase (%) | NII Growth (%) | Net Profit Growth (%) |
|---|---|---|---|---|---|
| IDFC First Bank | 46,596.44 | 63.65 | +7.55 | +23.61 | -53.55 |
| Dhanlaxmi Bank | 1,071.61 | 27.15 | +1.98 | +8.22 | +13.04 |
| City Union Bank | 13,282.17 | 179.25 | +1.43 | +10.00 | +13.04 |
| HDFC Bank | 13,23,484.04 | 1,730 | +1.19 | +8.49 | +3.51 |
| Karnataka Bank | 6,868.56 | 181.75 | +0.93 | +12.84 | -14.20 |
Conclusion
The increasing FII stake in these banking stocks suggests growing confidence in India’s banking sector. IDFC First Bank saw the highest increase in foreign investment, while HDFC Bank remains a dominant force in the industry. Dhanlaxmi Bank and City Union Bank showed strong profit growth, making them potential candidates for long-term investment.
However, investors should conduct further research and analyze risk factors before making any investment decisions. Always consider a stock’s fundamentals, management quality, and future growth prospects.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.