Foreign Institutional Investors (FIIs) are critical players in the Indian equity markets. Their investment decisions are driven by extensive research, global trends, and long-term projections. When FIIs aggressively buy a stock, it often indicates their confidence in the company’s future prospects. This, in turn, can trigger a positive sentiment in the broader market and among domestic investors.
In the June 2025 quarter (Q1 FY25), several Indian companies witnessed notable FII buying, but three stocks stood out. These companies not only received significant capital inflows from FIIs but also showed positive developments in business fundamentals, growth prospects, or industry positioning. This article highlights those three stocks, the reasons behind the interest, and what it means for investors.
1. HDFC Bank Ltd.
HDFC Bank remains one of the most preferred banking stocks for institutional investors, both domestic and foreign. During the June quarter, FIIs increased their holdings in the bank by over 1.2 percent. This rise in stake reflects renewed confidence in the Indian private banking space, particularly in HDFC Bank’s ability to deliver consistent growth.
Following its merger with HDFC Ltd., the bank has further solidified its position as the largest private lender in India in terms of market capitalization. The merger has led to a significant expansion in its balance sheet, a broader customer base, and access to a diversified loan book, including retail housing loans.
Additionally, the bank has maintained robust asset quality despite a rising interest rate environment. Its non-performing assets (NPAs) remain under control, and the capital adequacy ratio is strong. Analysts believe HDFC Bank is poised to benefit from India’s growing consumption, increasing credit demand, and digital banking adoption.
From a stock market performance perspective, HDFC Bank delivered solid gains during the quarter, supported by both institutional inflows and improving macroeconomic sentiment. It continues to be a core portfolio stock for long-term investors.
2. Larsen & Toubro (L&T)
L&T, India’s largest engineering and infrastructure conglomerate, saw a significant uptick in FII holdings, with foreign investors increasing their stake by nearly 1.8 percent in the June quarter. This strong buying interest can be attributed to the company’s robust performance and the government’s ongoing emphasis on infrastructure development.
L&T has benefited from increased capital expenditure in key sectors like transportation, urban infrastructure, power transmission, and defense. Its order book remains healthy and has grown steadily over the last few quarters, supported by both domestic and international contracts.
Another key factor behind the FII interest is the company’s operational efficiency. L&T has been focusing on improving its margins by optimizing costs and accelerating project execution. Its foray into green energy and digital solutions is also gaining investor attention.
Furthermore, L&T’s recent announcement of a share buyback and healthy dividend payout ratio have made the stock even more attractive to institutional investors looking for capital appreciation along with steady returns.
For long-term investors, L&T offers a combination of stability and growth. As India continues its infrastructure build-out, L&T is expected to remain a key beneficiary, and foreign investors appear to be positioning themselves accordingly.
3. Zomato Ltd.
Zomato has emerged as a surprise entry on the list of stocks with high FII interest in the June quarter. Foreign investors increased their stake in the company by approximately 2.6 percent during this period. The sharp rise in FII ownership reflects growing confidence in Zomato’s business model, financial trajectory, and position in India’s fast-evolving digital economy.
Zomato, which faced criticism in its initial years due to high cash burn and operational losses, has shown strong improvement in financial metrics over the last few quarters. Its core food delivery business is nearing profitability, and the company’s quick commerce segment, Blinkit, is seeing increased traction.
The company’s strategy to consolidate operations, improve order fulfillment speed, and enhance user experience has started yielding results. With better cost control, improved unit economics, and a clear path to profitability, Zomato has started attracting serious institutional interest.
Moreover, Zomato is seen as a proxy for India’s growing internet economy and rising digital consumption. With expanding reach into Tier 2 and Tier 3 cities and a strong brand recall, it is positioned to benefit from structural shifts in consumer behavior.
Despite its tech-based volatility, Zomato is gaining acceptance among FIIs as a long-term digital play in India, with strong growth potential over the next five to ten years.
Broader Trends in FII Buying During June Quarter
Apart from these three companies, FIIs also showed selective interest in capital goods, private banking, and consumer tech sectors. The June quarter witnessed a renewed FII inflow after a muted March quarter. This change in sentiment was driven by easing inflation in major economies, stable crude oil prices, and continued strength in the Indian macroeconomic environment.
Sectors such as banking, infrastructure, and digital commerce saw the highest interest. On the other hand, metals and commodity-based companies saw reduced FII holding due to global demand uncertainties and pricing pressures.
What Should Retail Investors Do?
While it is important to track FII activity, retail investors should avoid blindly copying institutional moves. FIIs often invest with long-term horizons and risk management tools not available to smaller investors. However, understanding why certain stocks attract institutional money can help identify quality companies with sustainable growth drivers.
If a stock is witnessing strong FII inflow along with improving fundamentals, robust earnings, and sectoral tailwinds, it could present an attractive opportunity. Investors should conduct their own due diligence, assess valuations, and align any decision with their financial goals and risk appetite.
Conclusion
The June 2025 quarter saw a meaningful shift in FII sentiment toward select Indian equities. HDFC Bank, L&T, and Zomato stood out as companies where foreign investors significantly raised their stakes. Each of these stocks represents a different aspect of India’s growth story — financial services, infrastructure, and digital commerce.
Their inclusion in FII portfolios sends a clear message: global investors believe in India’s long-term structural growth. For Indian investors, these buying trends offer valuable insights into potential wealth-creating opportunities in the equity markets.
Stay informed, stay diversified, and always invest based on solid fundamentals and a clear understanding of your financial objectives.
