Of top 20 cos of Gujarat, 2/3rd witness a rise in FII holdings.
Foreign institutional investors (FIIs) preferred to invest in sectors considered the best bet to tide over a slump. This is evident from the pattern of FII investment which emerged in the quarter ending September 2012.
During this quarter, Gujarat’s pharmaceutical sector was in the pink of health with sizeable overseas investment and increased holdings by investors in these companies. Pharma and FMCG are the scrips investors depend upon to tide over a slowdown or recession.
In September alone, FIIs pumped in $3.5 billion (around Rs18,800 crore) in the companies listed on the Indian stock exchanges. Of the top 20 companies of Gujarat, two-third companies witnessed a rise in FII holdings in their respective companies.
FIIs doubled their stake from 3.17% in June 2012 to 6.41% by end of September 2012. As per the data collected from the stock exchanges, Dishman Pharmaceuticals & Chemicals, promoted by JR Vyas, is the biggest FII gainer of second quarter of 2012-13. Claris Lifesciences Ltd also gained the trust of FIIs in the quarter as its holding is up by 2.44% in the quarter.
Torrent Pharmaceuticals Ltd, promoted by Sudhir and Samir Mehta, has seen 1.16% rise in FIIs stake in this quarter. Both the companies of Pankaj Patel — Cadila Healthcare and Zydus Wellness — registered a marginal rise.
Not only pharma companies, engineering companies too benefited from foreign investment. In September quarter — for the first time after four consecutive quarters — city-based engineering company, Sadbhav Engineering, succeeded in attracting FII holdings and that too with 2.43% rise. By the end of September 2012, the FII stake in the company stood at 15.62%. Similarly, building products maker, Sintex Industries Ltd, also got a fillip after the company received FII money after one year.
As the rupee started appreciating against the US dollar from levels of 57 to around 53, FIIs infused new hope into the weather-beaten companies.
Associate vice president, IndiaInfoline, Mahendra Prajapati gives the ‘magic of reforms’ all credit for this. “As the central government announced reforms, the FIIs gained confidence in the country as well as in the government. If parliament passes in the winter session the bill which was announced last month, more money is likely to be pumped in the financial sector of India,” he said.
The good winds blowing in from FIIs continue even in October with FIIs pumping Rs11,980 crore (around $2.25 billion) more till Friday, said MD & CEO of Dhanvarsha Fincap, Nilesh Kotak.
“In this quarter also, the FIIs have continued the trend of investing in FMCGs and pharmaceutical companies along with the Nifty scrips. The trend is likely to continue the third quarter also,” he said. However, not all have been blessed by FII windfall.
Adani Group’s Adani Enterprises Ltd continued to see fall in FII holding even in September quarter, while Adani Power has seen marginal rise and Adani Ports & SEZ witnessed marginal fall. At the same time, Arvind Ltd has also seen marginal cut in FII stake in the quarter.
The six state PSUs listed on bourses too did not see any major change. Of the six, GSPL, GNFC, GIPC and GACL have seen a small rise in FII holdings while GMDC and GSFC have registered marginal fall.
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