FII stake in India's 10 biggest stocks hits 20-year low. Time to go against the crowd?

FII ownership across India's top 10 listed companies has fallen to about 34% of free-float market capitalisation, a 20-year low below the 37% trough seen during the Global Financial Crisis, according to DSP Mutual Fund data. The top 10 stocks' share of overall market cap has shrunk to 17% from a peak of 39% in December 2019, with sharp FII pullbacks seen in Axis Bank (44% from 68%), Kotak Mahindra Bank (36% from 59%), and TCS (34% from 63%). DSP MF and Quantum AMC argue the resulting undervaluation makes large-caps a compelling contrarian bet, with every constituent of the Nifty Top 10 Equal Weight Index trading at or below its 10-year average valuation while 70% generate ROE at or above their 10-year average.