FIIs - Reduced exposure on BSE Sensex in July - Sept 2011

Overseas investors have scaled down their exposure in 19 Sensex companies, including RIL, Tata Motors and SBI, during the second quarter amid rising concerns of economic slowdown and weakening of the rupee.

Out of the 30-Sensex firms, 19 companies have witnessed a decline in their respective Foreign Institutional Investors (FIIs) holding, while in the remaining 11 stocks, foreign fund house have consolidated their stakes during the July-September quarter of current fiscal compared to preceding (April—June) quarter, according to data available with the BSE.

However, FIIs have increased their stakes marginally in 16 Sensex firms during the June quarter this fiscal and reduced exposure in the remaining 14 companies.

Market analysts attributed the decline in FII holding to challenging macro economic conditions and weakening rupee. “FIIs are shying away from the Indian firms on concerns of macro economic conditions and depreciating rupee,” said Mr Kishor Ostwal, CMD, CNI Research.

Metal companies such as Hindalco Industries, Tata Steel and Jindal Steel & Power Ltd (JSPL), country’s largest lender State Bank of India (SBI) and drug firm Cipla have witnessed maximum reduction in their FII holdings.

In contrast, FIIs increased their holding in auto stocks such as Mahindra & Mahindra, Maruti Suzuki, Hero MotorCorp and Bajaj Auto. However, Tata Motors was an exception to this category.

The FII holding in Hindalco Industries fell from 30.83 per cent to 28.24 per cent at the end of the July-September quarter and during the same period, FII shareholding in Tata Steel declined from 17.06 per cent to 14.61 per cent.

In addition, foreign fund houses stake in JSPL fell from 23.03 per cent to 21.88 per cent. Besides, SBI has seen a plunge of overseas investors stake by 2.23 percentage points to 8.65 per cent during the second quarter of financial year 2010—11.

Pharma major Cipla saw a fall of 1.16 percentage points to 13.57 per cent and FII stake in Tata Motors dropped by 1.1 percentage points to 21.88 per cent.

On the other hand, overseas investors have consolidated their stake in Mahindra & Mahindra by 2.8 percentage points Hero MotoCorp by 1.13 percentage points, Maruti Suzuki by 0.54 percentage points and Bajaj Auto by 0.13 percentage points.

FIIs shed its holding in country’s most valued firm Reliance Industries by marginally 0.05 percentage points to 17.32 per cent in the second quarter of current fiscal.

Mirroring the volatility in the global economy, FIIs were not very consistent while investing in the Indian market. In July, they invested a hefty sum of Rs 8,030.10 crore in the equity market and again infused Rs 485.40 crore in August. In September, they pulled out Rs 158.30 crore, according to the data of the stock market regulator Sebi.

Bought to you by

Soumya
Equity Analyst

Ingenious Investor
Equity Research Division

Ravina Consulting
No.24 Pattamal Plaza
3rd Cross Kamanahalli
BANGALORE 560084

For Free Stock Advise + Ideas
sowmya@ravinaconsulting.com
Talk / SMS 08105737966

Read - www.ingeniousinvestor.blogspot.com
Follow us - www.twitter.com/smartinvestor