The Hindu Business Line : FIs crawl out of K10 stocks — Retail investors, who bought them, burn their fingers

Almost two years after the Ketan Parekh stock scam broke out in early March 2001, an analysis of the shareholding pattern of K10 - the 10 stocks of Ketan Parekh's liking - shows that the general public has lapped up shares of these companies even after the scam broke, which were being desperately offloaded by the institutions.

The institutional holdings include the total shares held by domestic financial institutions, banks, mutual funds and foreign institutional investors.

As against March 2001, the public shareholding in Himachal Futuristic on December 31, 2002, has increased from 6.26 per cent to 39.07 per cent while institutional holding came down from 43.57 per cent to 10.98 per cent. Similar trends were witnessed in GTL where public holding went up from 18.25 per cent in March 2001 to 39.26 per cent in December 2002.

On the other hand, institutions reduced their exposure from 29.80 per cent to 9.89 per cent.

Aftek Infosys also saw institutional shareholding reduced from 23.50 per cent to 5.9 per cent while public shareholding increased from 20.87 per cent to 38.9 per cent during the same period.

In the case of Zee Telefilms, public shareholding increased from 7.59 per cent to 9.28 per cent, institutions also increased their holdings from 24.71 per cent to 32.72 per cent. The promoters, however, have reduced their stake from 59.61 per cent to 51.82 per cent. In the case of DSQ, while the institutions reduced their shareholdings from 11.53 per cent to 4.41 per cent, private corporate bodies have been big sellers. They have cut their exposure from 44.62 per cent to 21.38 per cent.

According to senior brokers, the pattern of trade during this period suggests that institutional holdings have been taken up by large number of general public who have bought in small lots. This despite the fact that world over the ICE story is coming to an end, a broker said.

Retail investors who picked up the stocks after the scam broke out have suffered major losses in the form of capital erosion. This becomes apparent looking at the present prices.

As of now, K10 stocks are being quoted close to their three-year low.

The prices of Zee Telefilms when markets closed on Friday stood at Rs 85.40 compared to Rs 235.30 two years ago.

HFCL has fallen to Rs 26 compared to Rs 985.80 and SSI has dipped to Rs 82.25 compared to Rs 1,360 on February 14, 2001.

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