The Hindu Business Line : Blue chips see only marginal cuts in FII stakes

BL Research Bureau Foreign institutional investors (FIIs) have sold Rs 1,89,000 crore worth of Indian stocks on a gross basis and Rs 11,000 crore on a net basis, in the July-September quarter.

This paints an alarming picture of FIIs drastically cutting back their stakes in Indian companies in these three months. But the latest shareholding patterns for blue chip companies do not show any dramatic reduction of FII stakes over the past quarter. Of the 13 Sensex companies for which September shareholding patterns are now available, only two – Bharti Airtel and Infosys – have shown one percentage point decline in FII holdings between June 30 and September 30.

For the other companies in this group FII stakes tweaked only marginally, by less than a percentage point. Even after the decline, FIIs continue to hold 32.5 per cent of Infosys’ equity and 22.6 per cent of Bharti’s outstanding capital. Two other companies where FII holdings have changed perceptibly are HDFC Bank and Tata Power, where their holdings have been reduced by 0.9 percentage point, for the quarter.

FIIs have not pared their stakes across the board either. Three companies out of the 13, in fact, show marginal increases in FII holdings over this period. These are HDFC (where their holding is up by 1.3 percentage point to 60.4 per cent), L&T (0.5 percentage point) and NTPC (up by 0.1 percentage point).

With the selling in the 13 Sensex companies accounting for a fairly small proportion of overall FII sales, it is possible that mid-cap stocks, which have taken deep cuts, have absorbed a good proportion of the selling pressure over the past quarter.

However, with many companies in the Sensex basket yet to disclose their shareholding patterns and data for most of the mid-sized companies yet to be put out, it may be early days to draw conclusions about the market cap or sector preferences of the FIIs, in their recent scramble out of the Indian stock markets.