Foreign institutional investors (FIIs), the main drivers of the Indian equity market, have upped their stake in 12 Sensex companies in the past quarter. Of the 24 Sensex firms that have disclosed their shareholding pattern for the quarter ended June, FIIs increased their exposure in 12 companies.
FIIs have increased their stake by more than 1% in Larsen & Toubro and Hindustan Unilever. Hero Honda Motor (0.88%), Infosys (0.76%) and HDFC Bank (0.7%) also saw a substantial increase in their foreign institutional holdings. State Bank of India?s FII holding decreased the most by 1.92%. JP Associates (1.42%), DLF (0.82%), and Tata Motors (0.62%) also saw significant erosion in FII exposure.
In terms of value, HDFC leads the pack with a total FII investment of R60,030 crore, followed by Infosys (R58,312 crore) and Reliance Industries (R49,999 crore). Total FII investment in Sensex companies at the end of June quarter stood at $110 billion.
For a one year period, FIIs have increased their stake the most in Hindalco Industries (3.82%), Tata Power (2.58%), Hero Honda Motor (2.51%) and Hindustan Unilever (2.18%). They divested the most in JP Associates (4.44%).
Among BSE 500 companies, FIIs have invested across sectors, particularly banks. Banks that have seen a major increase in FII stake include Federal Bank (3.98%), Development Credit Bank (3.39%), Dhanlaxmi Bank (3.05%), South Indian Bank (2.59%), Yes Bank (2.55%) and Lakshmi Vilas Bank (2.38%). ?The interest in banking stocks may be due to the view that the interest rate cycle is close to peaking,? said Andrew Holland, CEO ? equities, Ambit Capital.
Other firms that saw a substantial rise in FII holdings include India Infoline (6.21%), Sintex Industries (4.47%), Sun TV Network (3.99%), Asian Paints (2.86%), Praj Industries (2.78%), Titan (2.73%) and HDIL (2.53%).
FIIs invested $1.15 billion in the first quarter of FY12 and $0.49 billion in the first six months of the year. Toral Munshi, head ? India Equity Research of Credit Suisse Wealth Management, expects FII inflows into India to improve in the second half of the calendar year as has been the case historically. Holland expects global commodity prices to cool down in the coming months. ?This could ease inflationary pressures in India, which in turn would help attract FII inflows,? he said.