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Bajaj Auto, India's second-largest two-wheeler manufacturer, emerged as a favourite among Foreign Institutional Investors (FIIs) during the quarter ended March, 2013 despite the sector facing one of its worst period.
The foreign investors increased their holding in the counter by around 120 basis points to 18.2%, according to the statistics available at the BSE.
Interestingly, the company reported a massive decline of 10% in sales of its vehicles during the quarter. This pushed the overall growth in FY13 to the negative territory. However, this seems did not deter FIIs buying into the counter.
Stocks of Bajaj Auto, which started CY13 by hitting its 52-week high at Rs 2,229 tumbled since then to as low as Rs 1,657 a fortnight back. This had raised apprehensions among market participants about whether the counter is going to meet the same fate as its peer Hero MotoCorp faced, shares of which witnessed a free fall tanking to close to Rs 1,450.
Amid this, domestic institutions cut their holdings on the counter, however, FIIs used the opportunity well scaled up their stake in Bajaj Auto. On the other hand, Hero MotoCorp saw FIIs slashing their holding by around 1.4% during the quarter.
The company, which is usually known for high-dividend yield, has been seeing a steady rise of interest among FIIs for most part of the previous financial year. For instance, since June quarter, Bajaj Auto saw foreign investors' holding rising from 14.82% to the current 18.2% - up around 3.4%.
On the BSE, shares of Bajaj Auto are trading strong at Rs 1794.2, up 1.48% at 1115 am after hitting a high of Rs 1,804 in the initial trade on Wednesday.
