Foreign institutional investors (FII) have increased their stake in one out of every four companies, including Reliance Industries, Maruti Suzuki India and Infosys Technologies, in the fourth quarter of fiscal 2008-09, an analysis by capital market research firm CNI Research shows.
According to the analysis, FIIs have increased their stake in 109 firms out of the 394 companies surveyed. The report shows that on an average, foreign holdings have risen in about one-fourth of the companies surveyed.
FIIs have hiked their stake in car maker Maruti Suzuki India by 5 per cent to 19.4 per cent, in Reliance Industries by 0.5 per cent to 16 per cent and in Infosys by 1.9 per cent to 34.9 per cent.
Major companies whose FII holdings went up in the fourth quarter include cement maker ACC (10.3 per cent), Punj Lloyd (15 per cent), Nestle (8 per cent), Tata Steel (13.2 per cent), Wipro (5.9 per cent), IndusInd Bank (18.7 per cent) and UTV Software (5.6 per cent).
"This study should act as precursor for investors to decide the stocks in which they should be investing. Companies where FII are raising their stake have a greater probability of their share prices rising against other companies," CNI Research chairman and managing director Kishor P Ostwal said.
Other companies which saw FIIs significantly raising their stakes include Onmobile Global (9.31 per centstake rise), followed by Uttam Galva Steels (8.82 per cent), IVRCL Infra (5.51 per cent), GMR Industries (4.48 per cent), Austral Coke (3.95 per cent), Nelco (3.8 per cent), MindTree (3.01 per cent), Grasim (2.54 per cent), Hero Honda (2.33 per cent) and Unitech (2.28 per cent) also witnessed FII hike their holdings in the three months of last fiscal.
Also, FIIs have pumped in Rs 4,328 crore in the capital markets so far in April, the highest monthly infusion this year. They have made a gross purchase of equities worth Rs32,499 crore in April, while they sold shares valuing Rs28,170 crore, resulting in a net investment of Rs4,328 crore.
FIIs have pumped in more than Rs4,000 crore into the stock markets in the last 13 trading days of the new fiscal. FIIs are particularly buying now when pessimism is high, as they expect to reap benefits when the economy gains strength later, market experts said.
However, the foreign investors shed their stakes in 463 out the 869 firms that had FII exposure at the end of October-December 2008 quarter, with stocks across sectors getting offloaded in the January-March quarter.