The Hindu Business Line : Buffett enters Indian equity market? <br>Seen picking up oil stocks, RIL via the secondary market route

MR Warren Buffett, leading global value investor, is believed to have entered the Indian equity market, picking up stocks of some leading oil and petroleum companies.

If market sources are to be believed, Mr Buffett's Berkshire Hathaway Inc has made small investments in two fortune 500 companies - Reliance Industries Ltd (RIL) and Indian Oil Corporation (IOC) and the country's leading oil producer Oil and Natural Gas Corporation (ONGC). However, the information could not be confirmed independently.

According to brokers, Mr Buffett's entry into the Indian market follows his big investments in China recently. In April this year, he had disclosed that his company Berkshire Hathaway's invested in Petro China, the largest state-run oil and gas company in China, with an investment amount of about $42 million to boost stake to 9.1 per cent in the company.

An official with a leading foreign broking firm, who would not like to be named, said over the last few days there have been purchases by Mr Buffett in the three companies - RIL, ONGC and IOC through the secondary market route.

According to brokers' estimates, the investment would be in the range of Rs 250-300 crore based on the current market value of the share price of these companies. A dealer with a foreign broking firm said, "the talks are that FIIs are buying, but the main buyer is none other than Mr Warren Buffett himself ".

He said there was strong inflow of FII money into the equity market this month. Till Thursday, FIIs have pumped in Rs 980 crore in equity compared to Rs 1,221 crore during the whole of last month.

The active buying has also resulted in the stock price of these companies rising. The stock price of RIL has increased from Rs 260 in the middle of May to Friday's closing price of Rs 312.30 on BSE, a gain of 20 per cent. IOC has risen by 45 per cent from Rs 269 to Rs 392 and ONGC by 23 per cent from Rs 388 to 480.

According to analysts tracking the petroleum sector, the valuation of the listed oil companies in the country is much lower than those in other countries in Asia. Besides, the Indian oil sector has been deregulated. These factors have made the sector attractive for investors like Mr Buffett.

However, after the China Petro investment, Mr Buffett had declined to comment on the reason for investment saying that he would not talk on individual stocks.

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