MARCH 30: Quite often, the FII holdings has a dominant role in deciding the stock prices. HDFC has taken advantage of the recent permission to jack up FII holdings to 40 per cent. The holding of foreign entities will edge up over to 70 per cent. The stock price had gone up from Rs 228 to Rs 480. And now, it has been in the process of retreat alongside the market. So, it is difficult to see if the new provision for raising to 40 per cent for holding for FIIs alone can lift the stock. For all one knows, the earlier rise itself could have been in anticipation of this possibility. More likely, the stock could fall back to Rs 362 and Rs 315.Foreign NBFCs to add cutting edge
The relaxation of foreign investment guidelines for NBFCs is likely to give a buoyancy to Indian NBFC stocks. Foreign NBFCs have a three-year period to bring a domestic partner. The domestic participation could also be through an initial public offering, with the idea that they could divest a minimum of 25 per cent in the operating company. The foreign companies will certainly not overlook the advantage of roping in as a partner those domestic companies who have a good ground base. Kotak Mahindra Finance had risen from Rs 60 to Rs 300 and is now back at Rs 145. Birla Global, after rising to Rs 100 is back at Rs 60. As the NBFCs are offered more relaxations in terms of fund access as well as application, these scrips are bound to buoy once again.
Reliance on firm ground
The Reliance bosses' meeting with Clinton could lend support to the stock price of Reliance Industries. But with the market in a bearish grip, the scrip needs something more concrete to keep its buoyancy. Otherwise, it is likely to come down Rs 238 level, and I would not be surprised if it goes back to Rs 220. But at that price, you could not lose much and I think supporters will emerge.
Whirlpool to rise on new products
The Whirlpool scrip has not been affected much during the current bear onslaught. News that the company is expecting a 20 per cent growth over the next few years could have lured investors to hang on to the scrip. The possibility of a pick-up in exports as well as the intention to launch new products including microwaves, airconditioners and refrigerators could lend bottom support to the scrip price. The company, knowledgeable sources point out, has learnt its lessons the hard way in the washing machine business.
Its earlier models had a bug, which proved costly, but the revamped model is fine. The earlier experiment is reported to have cost some money. Whirlpool has a 24 per cent share in the direct cool and frost-free segments. New product launches will slot in the product price range of Rs 9000 to Rs 11100. The scrip had hit a bottom price of Rs 23 in mid-99. This time around, it has bounced off at Rs 25 and could hold its ground.
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