Enamoured by the large blue-chip stocks of Indian market, the foreign institutional investors (FIIs) have raised their exposure to five out of every six Sensex companies with purchase of shares worth an estimated $5 billion so far in 2012.
Even as the concerns are being raised about some changes in India's policy concerning overseas investors, the market data suggests a rather bullish stance adopted by the FIIs in their stock market dealings this year.
Most of the foreign entities sell or purchase Indian stocks through FII route and the data shows that only five out of 30 Sensex companies have witnessed a decline in their FII holding since January 2012— that too of a modest level.
On the other hand, the FII holding has increased in 24 Sensex companies during this period, while comparable data is not available for one entity, HDFC Bank.
Together, the FIIs are estimated to have purchased shares worth about Rs 27,000 crore (over $5 billion) in these 24 Sensex companies, while they sold shares worth about Rs 1,300 crore in the five other Sensex stocks so far this year.
Interestingly, FIIs have infused a net amount of about Rs 44,000 crore so far in the entire Indian stock market and more than half of this inflow has gone to the Sensex companies.
The Sensex comprises of 30 top stocks and is considered a barometer index of the Indian market. The average FII holding in these companies is about 20%. The total FII holding in Sensex companies is estimated at over $100 billion.
As per the latest shareholding pattern data of Sensex companies, the FIIs raised their stake in HDFC, ITC, Reliance Industries, Infosys, ICICI Bank, Larsen & Toubro, SBI, TCS and Tata Motors, among others, during January-March 2012 quarter.
Besides, they also raised their holdings in Hindustan Unilever, Tata Steel, Wipro, BHEL, Cipla, M&M, NTPC, Sun Pharma, Bajaj Auto, Jindal Steel, Maruti Suzuki, Tata Power, Hindalco and Sterlite Industries during this period.
So far in April also, the FIIs are not said to have indulged into any major sell-off in most of these stocks.
On the other hand, the five Sensex companies where FII holding fell during the January-March 2012 quarter included Bharti Airtel, Coal India, Hero Motocorp, GAIL India and DLF.
The higher exposure to the Sensex stocks in first quarter of 2012 coincided with a smart rally in the market, as Sensex gained about 2,000 points or over 12% in this period.
The previous year was not so good for Indian markets, as Sensex plunged by about one-fourth and FIIs recorded a net outflow of about Rs 2,700 crore from Indian equities in 2011.
During January-March 2012 quarter, the largest increase in FII holding was recorded by housing loan major HDFC.
The FII stake in HDFC rose from 59.01% to 65.81% in the first three months of this year, while Tata Motors, ITC, ICICI Bank, Infosys, L&T, Tata Steel, Maruti, Cipla and BHEL also saw significant surge in FII holdings.