The Hindu Business Line : FIIs to wait and watch on Reliance group

FOREIGN Institutional Investors (FIIs) are following a wait and watch policy on the shares of Reliance group of companies. Fund managers for FIIs are yet to revise their outlook on the Reliance share.

"Though, we are not telling our clients to decrease their exposure in RIL and Reliance Energy yet, we are also not telling them to take any fresh positions on these scrips. Because of the erosion in values of these scrips in last week's trading, the overall sense is that they have come into attractive price ranges. Despite this, we are not advising any fresh exposure, until these issues are sorted out," said an FII investment manager.

FIIs hold 22.85 per cent of the shares in Reliance Industries. Over 16 per cent of Reliance Energy is also owned by FIIs. This translates to FIIs holding 31.91 crore shares of RIL, which will be valued at Rs 16,269.6 crore at the end of Monday's trading. Similarly, 3.14 crore shares of Reliance Energy valued at Rs 1,749 crore today are held by FIIs.

FIIs concur that they would wait and watch the turn that events would take before deciding to exit the stock. "We are long-term investors and our outlook on scrips is for the long term. Fundamentally, the companies are not affected by any of this goings-on. If events reach a point where we see the companies' fundamentals getting affected, we will immediately make the necessary corrections to our portfolio. Reliance and their management are professionals and we are currently of the view that they would not do anything that would hurt the long term interests and commercial potential of any of their businesses," said an FII fund manager.

FIIs also take comfort in the fact that there have been ownership tussles in most family held corporations, world over. "As global investors, this is not our first experience of family members fighting for control. `Let the dust settle' guides our investments in these cases," he said.

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