Foreign institutional investors have reduced their holdings in leading private banks over the past year while increasing positions in select public sector lenders. The shift comes as performance gaps narrow between the two segments of India's banking industry.
Analysts attribute the change to improved results at public sector banks, which have narrowed the premium previously commanded by private lenders. Investors are now evaluating banks on individual merits instead of broad sector preferences.
The trend involves major institutions including HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank on the private side, alongside Canara Bank, Bank of India, Bank of Baroda and Indian Bank among public sector names.
Market observers note that the move reflects greater emphasis on specific bank fundamentals rather than sector-wide distinctions.