Foreign institutional investors, or FIIs, cut their holdings across several Indian private lenders compared with March. HDFC Bank’s foreign institutional stake slipped to 36.26%, against 38.16% previously. At Kotak Mahindra Bank, the corresponding figure moved to 25.21% from 26.40%. Axis Bank ended June at 39.91%, while ICICI Bank stood at 33.79%.

The pullback also reached smaller lenders. City Union Bank recorded a fall to 18.65%, compared with 23.37% in March. Bandhan Bank’s holding declined to 17.72% from 19.82%, while AU Small Finance Bank registered 35.98%, down from 37.26%. Such selling can weigh on share prices and valuations, though the report does not quantify any price impact.

There were exceptions to the broader retreat. Federal Bank’s foreign institutional ownership climbed to 27.43%, versus 25.79% earlier. Karnataka Bank reached 13.10%, up from 11.79%. IndusInd Bank also recorded a modest increase, taking its holding to 27.81%. The mixed picture shows that foreign investors were not reducing exposure to every lender.

WealthMills Securities’ Kranthi Bathini linked the changes to foreign selling across Indian equities over four to five quarters. He explained that banking and financial services face a larger impact because they account for a substantial portion of foreign holdings. The withdrawal therefore need not indicate deteriorating bank health.