Spotlight now on companies where FIIs raised stake recently

Riken Mehta

The sell-off by foreign institutional investors in government securities has finally caught up with the equity market. With the rupee close to its record low and the pressure on the currency expected to persist near term, fears are that FIIs will start pulling money out of Indian shares as well.

Stocks have been beaten down to a point where it may not make much sense for the long term players among FIIs to sell at these levels. However, short term players like hedge funds and exchange traded funds are another class of investor altogether.

These funds chase quick gains, and absolute price moves and currency swings matter more than fundamental factors. Beyond a certain threshold of tolerance, they will dump shares irrespective of the price.

The spotlight is now on the companies where FIIs increased their stake in the recent past (data is available only till the March quarter)

An analysis of the shareholding pattern of BSE-100 companies shows that foreign funds have hiked stake in nearly 50 companies by 1-9 percent between September 2012 and March 2103. So far this calendar, till May, foreign funds net bought around Rs 61,000 crore of shares. There is no way of knowing how much of the money has come from long term players like pension funds, insurers and India-dedicated funds, and how much from short term funds.

Source: Capitaline. % Chg is the price change from May 17 to June 20

Company FIIs holding (Mar qtr) FIIs holding (Sep qtr) Inc in Holding % Chg
Shriram Trans 49.45 40.97 8.48 -7.00%
Axis Bank  40.94 32.79 8.15 -19.10%
Suzlon Energy  13.13 5.43 7.7 -35.10%
IndusInd Bank  40.49 34.26 6.23 -12.10%
Federal Bank  45.93 39.89 6.04 -9.70%
Zee Entertainment 41.69 36.14 5.55 -6.10%
NTPC  9.37 3.95 5.42 -12.30%
Dr Reddy’s Labs 29.66 24.52 5.14 0.00%
M & M 35.01 30 5.01 -4.50%
HDFC  73.67 68.72 4.95 -9.60%
Satyam Computer 30.35 26.01 4.34 5.80%
NMDC  4.76 0.66 4.1 -15.50%
HCL Technologies  24.32 20.31 4.01 5.50%
Adani Enterp 18.97 15.08 3.89 -22.30%
HPCL  9.75 6.24 3.51 -19.50%
Cipla  23.89 20.79 3.1 -10.70%

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