The fourth quarter of FY09 saw foreign institutional investors (FIIs) continue selling shares of public sector banks. According to shareholding data for the quarter ended March 31, the FIIs’ holding in five public sector banks fell by more than 3.5 per cent, while it declined in three others by over 2 per cent each.
Private sector banks were not spared either, with FIIs reducing their stakes by more than 2 per cent in such banks as Axis Bank, HDFC Bank and Yes Bank.
The Children’s Investment Fund Management turned out to be the largest seller during the quarter under review after it offloaded most of the banking stocks in its portfolio, which amounted to Rs 3,113 crore. In fact, the UK-based hedge fund reduced its holdings to less than 1 per cent in SBI, Punjab National Bank, Union Bank of India, Bank of Baroda and Bank of Maharashtra.
| THE SUBSTITUTES | ||
| Bank | Buyer | Chg* (%) |
| SBI | LIC | 4.98 |
| IOB | LIC | 3.43 |
| HDFC Bank | LIC | 2.43 |
| UBI | ICICI Pru | 1.39 |
| Corporation | RCT# | 1.15 |
| PNB | ICICI Pru | 0.98 |
| Corporation | ICICI Pru | 0.74 |
| Allahabad | LIC | 0.65 |
| BOI | LIC | 0.61 |
| ICICI Bank | LIC | 0.58 |
| *Increase in stake between Jan ’09 and Mar ’09 # RCT — Reliance Capital Trustee Source : BSE | ||
Most of the sold shares were purchased by domestic mutual funds and insurance companies, including Life Insurance Corporation of India (LIC), ICICI Prudential and Reliance Mutual Fund.
LIC bought the shares of SBI, HDFC Bank, Allahabad Bank, Bank of India and Dena Bank, while ICICI Prudential purchased shares of Corporation Bank, HDFC Bank, Punjab National Bank and Union Bank of India during the quarter.
In SBI alone, life insurance giant LIC was the biggest buyer, increasing its holding by almost 5 per cent from 4.58 per cent previously to 9.56 per cent by the end of March 2009. At the same time two FIIs, which had a stake of over 1 per cent – Children’s Investment Fund (1.40 per cent) and Orient Global Cinnamon Capital (1.7 per cent) – reduced their holdings to below 1 per cent.
Even in HDFC Bank, LIC increased its holding by 2.43 per cent from the 5.07 per cent held earlier to 7.50 per cent. ICICI Prudential also increased its stake by 0.52 per cent from the previous level of 3.02 per cent to 3.54 per cent.
FIIs’ holding in the private sector bank declined by 1.7 per cent from 27.4 per cent earlier to 25.7 per cent. BankMuscat SAOG, which had a 2.13 per cent stake in the quarter ended December 2008, reduced its holding to less than 1 per cent by the end of March 2009 quarter.