FIIs increase PSU exposure, trim stakes in private banks

Foreign institutional investors are shifting exposure from large private banks to PSU lenders, with FII ownership in HDFC Bank falling more than 6 percentage points to 36.26% and Kotak Mahindra Bank down 5.48 percentage points by end of June. Conversely, Bank of Maharashtra saw a 4 percentage point rise, Bank of India up 3.34 points, and Bank of Baroda up 2.06 points. The Nifty PSU Bank index has risen 14.42% since July 1, 2024, beating the 4.51% gain in the private bank index, as PSU banks now deliver an aggregate RoE of about 15% versus 12% for private peers.