FII net buys on the secondary market on February 24 reached an all-time high of Rs 6,920 crore, above the November 4, 2010, figure of Rs 6,774 crore.

This was a surprise because Citibank offloaded 14.5 crore shares of HDFC that day for Rs 9,555 crore, in two bulk transactions. SEBI reported gross sales of only Rs 2,070 crore.

SEBI sources said the Citibank sale was not included in the FII figure because it represented a drawdown of foreign direct investment, not FII.

This means that foreign investors as a group, in fact, net sold equities worth Rs 2,781 crore last Friday.

Still, Citibank apart, they were large net buyers. What did they buy?

Since the spike in FII buys and market turnover that day (to Rs 8,990 crore and Rs 26,500 crore respectively) can be entirely accounted for by the spike in HDFC volumes, it is likely that two-thirds of the shares offloaded by Citibank were picked up by FIIs.

When HDFC releases the latest shareholding data a month from now, the FII stake could go up from 59 per cent to around 64 per cent.  The FDI stake, 22 crore shares or 15 per cent as of December end, will drop sharply, but total foreign investor holdings will not drop so much.

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