The Hindu Business Line : How they rejigged their stakes

FIIs, which resorted to selling much of their stakes in the equity markets until March 2009, have since taken a U-turn. The shareholding pattern for the June 2009 quarter indicates that FIIs raised stakes in one out of two companies.

The companies in which the FIIs augmented stakes are those that were trading at a relatively low price-earnings ratio before this rally. This suggests that attractive valuations may have driven FII action. The hesitation about small- and select mid-cap stocks that FIIs seem to have had is evident from the list of stocks where foreign investors offloaded a sizeable portion of their investment.

The table below lists the companies that registered the maximum increase and decrease in FII investments in the latest quarter:

Take a look at the stocks where FIIs were bearish till March 2009, but turned optimistic and raised their stakes from March 2009. Many of these (such as Gujarat NRE Coke, Suzlon Energy and Bajaj Hindustan) are companies which raised capital through qualified institutional placements.

Despite all turmoil that happened in the equity market between September 2008 and March 2009, FIIs did not lose faith in a few mid- and small-cap companies. They increased their interest in these companies through last year and continued to do so in March-June 2009 too.

Fifty-one out of 377 companies find mention in this list. Following are companies which saw the maximum buying activity during the lean quarters between December 2008 and March 2009 and still see the same kind of FII interest.

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