FIIs hold one in every five blue-chip shares

One in every five shares, or 20 per cent, of India Inc's blue-chip companies is now in the hands of foreign institutional investors.

The campaign, which began in fiscal 2003-04, seems to be unstoppable, with their holding in Sensex stocks inching up from 13.5 per cent at the end of March 2003 to 18.5 per cent in March 2004 and 20.2 per cent as on December 2004, data filed by these companies with the stock exchanges show.

This study by the Business Standard Research Bureau shows FIIs have bought 187.8 million shares of the 30 scrips in the Sensex basket between October 2004 and December 2004, taking their average holding in the stocks to a shade over 20 per cent.

Reacting to these numbers, Bharat Shah, chief executive officer, ASK Raymond James, said, "It is a clear affirmation that Indian companies have come of age. Also, this is an indication of FIIs moving out of depreciating dollar-denominated assets into assets denominated in appreciating local currencies."

FIIs stocked up shares of almost all Sensex stocks, with Cipla and Tata Motors being the exceptions. In these two counters, FIIs were sellers, to the extent of 900,000 shares of Tata Motors and 550,000 shares of Cipla.

FII holdings in nine Sensex stocks increased by over 2 percentage points in each case, while in 11 stocks their holdings increased by over 1 percentage point each. Their holding in eight Sensex stocks increased by less than 1 percentage point.

FIIs seem to have developed a sharp liking for cement giant Gujarat Ambuja Cement, where they increased their holdings by 5.5 percentage points to 28.7 per cent.

Genesis Indian Investment Company (3.12 per cent) and California Public Employees Retirement System (1.74 per cent) were the two new FIIs that invested in the company's stock during the quarter.

Apart from Gujarat Ambuja Cement, FII holding in Maruti Udyog, Tata Power, Grasim Industries, Hero Honda Motors, Zee Telefilms, Satyam Computer Systems, HDFC Bank and Bharti Tele-Ventures increased by over 2 per cent.

In Maruti Udyog, FIIs increased their holding by close to 4 percentage points from 11.99 per cent as on September 30, 2004 to 15.92 per cent at the end of December quarter, largely due to two new investors increasing their stakes: HSBC Global Investment Funds hiked its stake to 2.88 per cent and Morgan Stanley & Company International to 1.4 per cent.