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Wednesday, Nov 27, 2002

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Retail interest more in IT, less in FMCG scrips in 2002

G. Madhan

THE Indian public find the stocks of IT companies more attractive and those of fast moving consumer goods manufacturers (FMCG) less attractive now than in 2001. An analysis of the shareholding pattern of the Indian public in listed companies, issued by the National Stock Exchange, reveals that the Indian public shed an average of 36.9 per cent of their stake in FMCG companies, while added as much as 38.2 per cent of shares in IT companies.

The Indian public, at the end of March 2002, held an average of 17.3 per cent of all the listed companies. The number was 17.5 per cent during 2001. The decline in the public holding was significant in FMCG, as the holding came down from 33.76 per cent to 21.31 per cent. Open offers of some of the leading companies such as Reckitt Benckiser appear to have induced them to shed the stocks in FMCG companies.

On the other hand, institutional investors (FIs, FIIs & MFs) have become more FMCG-heavy. For example, financial institutions have increased their holding in FMCG companies by 5.3 percentage points, while foreign institutional investors have increased their holding by a whopping 11.2 percentage points. Other sectors that lost public shareholding include services, manufacturing and telecommunication sectors.

In the IT sector, the public holding has gone up significantly from 16.21 per cent in 2001 to 22.41 per cent in 2002 at the expense of shareholdings of FIIs. The northward movement of IT stock prices, after a sustained decline during 2001, appeared to have induced the public. Other sectors that evoked public interest included petrochemical, pharma, infrastructure and finance.

In the media and entertainment sector, strikingly 63 per cent of the holdings are with private corporate bodies though the requirement of public offer stands only at 10 per cent, while the holding of Indian promoters is the highest in manufacturing sector and stands at 53.7 per cent.

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