FIIs reduce holding in one-third of BSE 500 stocks

BL Research Bureau Foreign institutional investors (FIIs) may have continued to pour money into the Indian markets in recent months, but they weren’t uniformly bullish on all stocks or sectors.

FIIs have actually trimmed their stakes in half of the BSE Sensex companies in the quarter from June to September 2009.

Big names as Bharti Airtel, ONGC, BHEL and ICICI Bank saw a dip in FII ownership over the past quarter. Over 180 companies in the BSE 500 basket also saw a fall in their FII holdings in this period.

Media shed

Shareholding patterns, in fact, show that it was a limited set of stocks that benefited from FII buying in recent months, as they continued to cash out where stock prices had run-up.

FIIs reduced holdings in many index and mid-cap stocks, even as they subscribed enthusiastically to qualified institutional placements.

Media and entertainment was one sector that FIIs singled out for significant selling, trimming their stakes by between 3.5 and 9 percentage points in stocks such as Television Eighteen, NDTV, Wire & Wireless and Entertainment Network.

FIIs have, in fact, been pessimistic on media stocks from the June quarter itself, when stocks such as Balaji Telefilms, Zee News and Reliance MediaWorks saw a drop in FII holdings.

No sector bias

Outside of cutting exposure to media stocks, FIIs did not display much of a sector bias in trimming their holdings and instead, took a stock-specific view for their buys and sells.

For instance, within the sugar sector, the stock of Balrampur Chini Mills saw FIIs trim their stakes by 5.7 percentage points, but Shree Renuka Sugars saw a 4.7 percentage point increase in FII holdings.

While FII holdings in Gammon India fell by 5 percentage points for the quarter, their holdings climbed steeply in stocks such as Maytas Infrastructure, Lanco Infratech and Nagarjuna Construction. They trimmed stakes in mid-sized software player Tanla Solutions, while adding in 3i Infotech.

The realty sector, which raised massive funds through the qualified institutional placement route, was the rare one to see an across-the-board increase in FII holdings. Companies such as Unitech, Hindustan Construction Company, HDIL, DLF and Sobha Developers all saw major increases in FII stakes.

Overall, the level of FII holding in the BSE 500 universe has risen negligibly in the September quarter; from 13.3 per cent in end-June to 13.9 per cent by end-September.

The preceding June quarter saw the FII holdings rise more sharply from 12.5 to 13.3 per cent.