FIIs raise stake in Nifty firms to 43%

Buy shares worth Rs 30,456 crore in June quarter, mostly from open market.

The share of foreign institutional investors (FIIs) in free-float market capitalisation of the S&P CNX Nifty index of 50 companies has gone up to 42.87 per cent as on June 30 from 40.73 per cent on March 31, 2009. Their share was around around 50 per cent in March 2007.

The rise is on account of an increase in FIIs’ stake in 40 of these 50 companies in the quarter ended June 2009. While they have stepped up holding in 37 companies through open market purchases, in case of DLF and Unitech, the increase has been through the qualified institutional placement (QIP) route. They bought 6.01 per cent stake in Suzlon Energy from its promoters.

JP Morgan Asset Management, Citigroup Global Markets, CLSA Mauritius, Euro Pacific Growth Fund, Emerging Markets Growth Fund and Swiss Finance Corporation (Mauritius) are among the foreign investors that have raised their stake in Nifty companies between April and June this year.

According to data compiled by the Securities and Exchange Board of India (Sebi), FIIs bought shares worth Rs 30,456 crore ($6.29 billion) during the June quarter. FIIs’ net outflow in the earlier five quarters, between January 2008 and March 2009, was Rs 59,139 crore ($14.38 billion).

On the back of net inflows by FIIs, mostly through the open market route, the benchmark index recorded its 17-year-high quarterly gain of 49 per cent during the first quarter of the current financial year. Also, of the 21 Nifty stocks in which FIIs have increased their stake by over 1 per cent, as many as 11 have appreciated more than 100 per cent since March 31, 2009.

FIIs’ holdings in real estate major DLF increased 9.16 per cent to 15.40 per cent at the end of the June quarter as against 6.24 per cent in the March quarter. Euro Pacific Growth Fund (3.26 per cent) and Emerging Markets Growth Fund Inc (1.31 per cent) bought a combined 4.57 per cent stake in the company via a QIP. The promoters sold 9.9 per cent to institutional investors for Rs 3,860 crore.
 

FORWARD MARCH FIIs holding in Nifty companies
In Rs	Market price as on		%chg	FIIs holding in Nifty
	Mar 31, '09	July 21, '09		June 30, '09#	Change*
DLF	167.30	343.55	105.35	15.40	9.16
Suzlon Energy	42.35	91.00	114.88	16.41	7.75
Unitech	34.90	81.50	133.52	15.47	7.23
Larsen & Toubro	671.40	1472.55	119.33	18.80	3.96
Axis Bank	414.95	884.40	113.13	34.66	3.47
Reliance Infra	515.54	1127.75	118.75	19.49	3.08
ICICI Bank	332.80	772.70	132.18	65.25	2.66
Reliance Capital	353.45	869.65	146.05	23.29	2.18
Jindal Steel	1205.55	2799.40	132.21	20.53	1.93
Tata Steel	205.90	412.15	100.17	14.54	1.34
HCL Tech	102.05	229.50	124.89	17.93	1.21
*Change over March 31, 2009                                                                 #Figures in %

In Larsen and Toubro, FIIs’ holding has crossed the 15 per cent mark after a gap of 15 months. Their stake in the engineering firm has increased 3.81 per cent to 15.71 per cent at the end of the June quarter from 11.90 per cent in the March quarter. In the March 2008 quarter, FIIs held 17.33 per cent in the company.

In three ADAG group companies (Reliance Infrastructure, Reliance Capital and Reliance Communications) and two private sector banks (HDFC Bank and Axis Bank) in the Nifty, FIIs raised their stake in the range of 2-4 per cent during the quarter.