As global sub-prime tremorts have been building up in the global market and threatening profitability of several leading banks, foreign institutional investors have been building up their stakes in Indian banks. Clearly, the private sector banks have been the favourite with the FIIs.
Their stake in private banks has grown faster than that in public sector banks (PSB) in the month of June.
Out of 17 private bank stocks, 11 banks saw an increase in FIIs stake. Significant increase in FIIs stake was seen in the case of Federal Bank (33.64% to 35.52%), Bank Of Rajasthan (0.64% to 6.09%) and Yes Bank ( 24.89% to 30.59%) on June 30, 2007 from the level of March 31, 2007.
But the FII share reduced in the case of Kotak Mahindra Bank (22.43% to 20.8%), ING Vysya Bank ( 24.31% to 22.87%) and HDFC Bank ( 32.37% to 26.53%).The heavy weight ICICI Bank saw FIIs stake increase marginally from 45.02% on March 31, 2007 to 45.81% on June 30, 2007. The average share of FIIs stake in total of 17 private banks increased from 22.92% to 23.59% during the study period.
The top three private banks, according FII Stake, on June 30, 2007 are ICICI Bank, South Indian Bank and Federal Bank. Among the 18 PSBs, nine saw an increase in FIIs stake.Significant increase in FIIs stake was seen in the case of Dena Bank (11.81% to 13.77%) and Bank of India (15.43% to 16.12%). And FII share reduced in the case of IDBI (10.26% to 9.27%) and Corporation Bank (9.87% to 9.18%), during the above period.
