Mumbai: Foreign institutional investors (FIIs) have increased their holding in Hindustan Lever (HLL) by 1.18 per cent to12.57 per cent during the quarter ended 31 December 2002. The Emerging Market Growth Fund, the leading FII with an equity holding of 3.52 per cent in HLL earlier, has increased its stake in the company by nearly half a per cent and now has a 3.91-per cent stake.

According to data provided by the Bombay Stock Exchange, Life Insurance Corporation (LIC), has reduced its stake in HLL marginally by around 0.84 per cent from its earlier holding of 3.83 per cent to the current 2.99 per cent during the last quarter.

Analysts tracking the company say LIC has been profit booking at the HLL counter in the last quarter as the HLL scrip moved up considerably. But other insurance companies like Oriental Insurance Company, New India Assurance and National Insurance, which control over 1 per cent stake each in HLL, have maintained their holdings in the fast-moving consumer goods major.

Also, with the consolidation in its foods division coming close to completion, HLL has decided to now focus on investing more in the business.

Says HLL chairman M S Banga: “We are driving the foods business. There has been a steep change in the profitability of the foods business. With the consolidation mode over, investments will now start. We have set out to improve the foods business, and now we believe that it is fit for growth.”

In line with the strategy, the company is set to foray into the water business under a new brand by mid-2003. “We are cautiously optimistic about the future, and believe that innovation will be the key to the future of beverages,” Banga adds. HLL’s test marketing of basmati rice in North India will soon result in the rolling out of the product in the rest of the country.

“Annapurna basmati rice will be our domestic rice product, since exports in basmati is one of our export success stories. We will roll it out in the rest of the country depending on the test-market results. Pricing is the key and that is what is being worked out,” says Banga.