Former raise stake, and latter prune holding, in over half of top BSE 500 firms; analysts see foreign preference for safety in returns.
Despite uncertainties in the global markets, foreign institutional investors (FIIs) remained bullish on Indian companies during the quarter ended June 30. The market participants say FIIs are focusing on large companies with better fundamentals and visibility and not distributing their resources across the board.
From the statistics compiled by the Business Standard Research Bureau, till date 343 of the top 500 companies (BSE 500) have declared their shareholding pattern for the June quarter. Of these, FIIs’ stake in 192 companies or around 56 per cent had increased in the June quarter compared with the March quarter.
Jubilant FoodWorks emerged as the hot favourite of foreign investors. The counter witnessed FIIs’ holding increase by around nine percentage points. One percentage point is 100 basis points. This was followed by Gujarat Pipavav Port (7.35 percentage points), India Infoline, Sintex Industries and Alok Industries. Among other prominent companies that saw an increase in FII holding were Arvind, Asian Paints, Sun TV, Titan Industries, Bombay Dyeing, VIP, Larsen & Toubro, Jet Airways, Hindustan Unilever, Tech Mahindra, Hero Honda, Aditya Birla Nuvo, Infosys, HDFC Bank and Bharti Airtel.
U R Bhat, managing director of Dalton Capital Advisors, says: “It seems FIIs are zeroing on better companies and not distributing their resources on a large number of companies. Though the inflows have been marginal, they are finding value in the large-cap companies and moving out of smaller companies.”
The April-June period saw fluctuations in the net inflows in equities from FIIs. The current financial year began with a net inflow of Rs 7,018.50 crore in April. While FIIs pulled out funds worth Rs 5,158 crore in May, they invested Rs 3,310 crore in Indian equities in June. Overall, net inflows during the quarter were Rs 5,171.20 crore. In the current month (July), net inflows in equities from FIIs have already reached around Rs 7,000 crore. Agrees Ambareesh Baliga, chief operating officer of Way2Wealth: “It was only in the latter half of the quarter that net inflows from FIIs started to rise again. I believe the fund flows are of a short-term nature and it makes sense (for FIIs) to put this money in large companies, wherefrom safer returns could be made.”
On an aggregate basis, FIIs reduced their holding in 145 companies (out of 343) during the period. Patni Computer Systems miserably failed to lure foreign institutions, as the latter reduced their stake by a little over 10 percentage points, followed by ABG Shipyard (6.14 percentage points), Mastek, GVK Power, IDFC and Cairn India. Other companies which saw FIIs holding decrease included Amtek Auto, Lanco Infratech, LIC Housing Finance, Hindustan Construction, Dena Bank, SKS Microfinance, DB Realty and Nagarjuna Fertilisers.
| WHAT’S HOT, WHAT’S NOT | |||||
| Company |
FIIs (%) | Company |
DIIs (%) | ||
| June 2011 | Change (in BPS) | June 2011 | Change (in BPS) | ||
| TOP GAINERS | |||||
| Jubilant Food. | 33.4 | 889 | Guj Pipavav Port | 22.2 | 1,046 |
| Guj Pipavav Port | 23.1 | 735 | Power Fin.Corpn. | 9.2 | 612 |
| India Infoline | 35.7 | 621 | Time Technoplast | 10.9 | 278 |
| Sintex Inds. | 37.8 | 447 | Volt.Transform. | 8.2 | 251 |
| Alok Inds. | 20.7 | 415 | Divi's Lab. | 16.1 | 223 |
| Sun TV Network | 13.5 | 399 | ICSA (India) | 5.0 | 214 |
| Federal Bank | 40.1 | 398 | Aurobindo Pharma | 13.0 | 200 |
| NCC | 42.3 | 389 | Apollo Tyres | 11.7 | 197 |
| Dev.Credit Bank | 11.7 | 339 | LIC Housing Fin. | 7.8 | 194 |
| Zuari Inds. | 8.0 | 310 | Arvind Ltd | 16.9 | 180 |
| TOP LOSERS | |||||
| Patni Computer | 6.9 | -1,061 | Hind.Zinc | 1.9 | -2,963 |
| ABG Shipyard | 12.7 | -614 | Siemens | 8.6 | -1,227 |
| Mastek | 22.9 | -489 | SREI Infra. Fin. | 0.3 | -1,152 |
| Provogue (India) | 15.4 | -463 | Jubilant Food. | 1.8 | -592 |
| GVK Power Infra. | 22.6 | -455 | ARSS Infra | 0.3 | -345 |
| Volt.Transform. | 24.1 | -448 | Titan Inds. | 6.2 | -315 |
| I D F C | 46.8 | -433 | Federal Bank | 21.7 | -302 |
| Cairn India | 7.5 | -423 | Sintex Inds. | 5.8 | -297 |
| Divi's Lab. | 11.6 | -367 | Yes Bank | 7.0 | -292 |
| Ambuja Cem. | 23.7 | -342 | India Infoline | 4.6 | -286 |
| The table indicates the top companies which have seen an increase/decrease in FII & DII ownership Change is over quarter ended March 2011 Source: BSE, Compiled by BS Research Bureau | |||||
Though FIIs increased their holding in more than half of the 343 companies during the June quarter, domestic institutional investors (DIIs) remained largely bearish. In the quarter, DIIs increased stake in only 124 companies, while they cut their holding in a little over 200. Gujarat Pipavav Port, among the top FII picks, was also DIIs’ top pick, as they increased holding in the company by 10.46 percentage points, while they reduced stake in Hindustan Zinc from about 32 per cent to a little less than two per cent. Promoters’ holding remained unchanged in 227 companies. However, in 70 companies, promoters reduced their stake, while they increased holding in 46 in the June quarter. On the retail front, 151 companies saw retail holding on the rise, while 179 companies witnessed a decline.
