Foreign investors renew interest in large firms across sectors

Foreign investors raise stake most companies of S&P BSE-500 in Q1

Foreign investors’ holdings in more than half of India’s broad-based S&P BSE-500 index companies are on the rise, shows the recent shareholding pattern in the quarter ended June.

These cover foreign institutional investors (FIIs), foreign venture capital investors, corporate bodies, foreign collaborators and global depository receipts. This comes even as the country's economy finds no rescue from its sluggish growth over several quarters and more downgrades from international brokerages might be unavoidable.

According to the data compiled by Business Standard’s research desk, 464 companies of the S&P BSE-500 index have announced their shareholding for the April-June quarter so far. Of these, foreign investors have raised holdings in 248, while keeping stake unchanged in 21 entities. They cut exposure in the other 195.

The new money has come across sectors. Among the companies are AstraZeneca Pharma, PVR, Fortis Healthcare, Stride Arcolab, United Phosphorus, Bharti Airtel, Jet Airways, Dr Reddys Laboratories, Oil India, Mahindra & Mahindra, Britannia Industries, NTPC and Reliance Communications.

In some of these, the foreign buyers have increased their exposure by five per cent to as much as 15 per cent. Interestingly, telecom giants Bharti, Reliance Communications and Idea Cellular have seen such buying over recent weeks, their shares gaining substantially.

According to market participants, India's stock markets are currently trading at a 15-year average valuation of 13-15 times forward earnings. This is a reasonably fair value for investments.

Among banks, the space hit hard so far this year, ICICI, Union Bank, UCO Bank and Oriental Bank of Commerce are among those shown priority by foreign investors.

In the struggling cement sector, too, they have increased exposure, with a bias for South-based manufacturers, notably mid and small-size players such as Madras Cements and India Cements.

Companies which saw cuts in exposures in foreign investors' portfolios include Sterlite Industries, Essar Oil, Opto Circuits, HDIL, Mannapuram Finance, Apollo Tyres, Hindustan Unilever, TCS, Infosys, Larsen & Toubro and Ambuja.