Reliance Industries finds favour among FIIs, but DIIs pare holdings in Q3

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The rise in the FII holding comes at a time when DIIs marginally reduced their holding from 11.84% in previous quarter to 11.46% pct. Reuters The rise in the FII holding comes at a time when DIIs marginally reduced their holding from 11.84% in previous quarter to 11.46% pct. Reuters
SummaryReliance Industries (RIL), the second biggest company in terms of market capitalisation, saw foreign institutional investors’ (FIIs)

Reliance Industries (RIL), the second biggest company in terms of market capitalisation, saw foreign institutional investors’ (FIIs) holding rise to 18.26% in the quarter ended December 31, 2013. In the previous quarter, FII stake in the company stood at 17.69%.

The rise in the FII holding comes at a time when domestic institutional investors (DIIs) marginally reduced their holding from 11.84% in previous quarter to 11.46%. Keeping in line with the DIIs, retail investors have also pared their stake marginally from 10.35% to 10.2%. Overall, the total public shareholding in RIL has come down to 51.18% from 51.27% in previous quarter.

Incidentally, the third quarter of the current financial year (FY14) saw foreign institutional investors putting in $6.5 billion in the Indian equity market even as their domestic counterparts sold equities worth $4.7 billion.

Analysts, meanwhile, expect RIL shares to gain further ground in the near future as the Cabinet Committee on Economic Affairs (CCEA) approved higher price for gas produced from RIL’s KG-D6 basin. “We believe the Cabinet decision clearing the uncertainty on pricing of gas produced at KG-D6 is a key positive as this would likely end the political debate around the D6 gas price increase, allowing the market to focus on the company’s strong medium-term earnings growth prospects,” said Goldman Sachs in a recent research report. The scrip has gained 2.86% since the CCEA took the decision on December 19. Meanwhile, the stock gained 6.64% in 2013.

Brokerages feel the exploration and production (E&P) sector could see increased flow of investments, going ahead. “We believe that the E&P sector is poised to revive, and the present action as well as imminent notification of the gas price hike to the firms could convince many fence-sitting investors of incumbent growth,” added Macquaire in a recent report.

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