FIIs picked up 6.78 cr PSU bank shares in June

Surely not knowing what lay in store from them, foreign institutional investors (FIIs) mopped up 6.78 crore shares of public sector banks during the quarter ended June 2004.

The Reserve Bank of India's (RBI) draft proposal, suggesting the maximum shareholding of any single entity to be capped at 10 per cent, hit all investors in the solar plexus on July 2.

Market analysts say the FII had made significant purchases during the quarter expected the 10 per cent cap on voting rights to be removed in the Budget. What they got instead was the RBI draft proposal which disallows single entity holding over 10 per cent stake in any Indian bank.

As such, FIIs love for PSU bank's continued unabated in the April-June 2004. They made fresh purchases in PSU banks while booking profits in private bank scrips.

The fresh FII buying in the PSU bank stakes in the April-June quarter was the highest in the case of Corporation Bank, where they added another 2.04 percentage point holdings.

The shareholding data filed by 19 public and private banks with the exchanges shows FIIs have upped stakes in Punjab National Bank, Corporation Bank, Indian Overseas Bank, Canara Bank, Bank of Baroda and Union Bank of India during the quarter. FIIs also bought shares of ICICI Bank and HDFC Bank.

FIIs reduced their holding in Global Trust Bank, UTI Bank, Karnataka Bank, South Indian Bank, Centurion Bank, Bank of Rajasthan, Kotak Mahindra Bank and IDBI Bank during the quarter.

Major FII buying was seen in Corporation Bank, in which they increased their stake by 2.04 per cent in the quarter ended June 2004. Thus, the FII stake in the bank has crossed the 10 per cent mark from 8.58 per cent at the end of March 2004 to 10.62 per cent at the end of the June 2004 quarter.

Genesis Indian Investment Company Ltd holds 2.94 per cent stake in the bank while the Government of Singapore Investment Pte Ltd bought an additional one per cent stake to take its total holding to two per cent in the bank during the quarter.

In Punjab National Bank, Alliance Capital Management and UBS Securities Asia Ltd bought one per cent each during the quarter. FIIs holds a total 12.82 per cent stake in the bank at the end of the June 2004 quarter.

FIIs bought an additional 5.81 crore shares of ICICI Bank during the quarter.

FII holdings in the bank increased from 46.71 per cent in the March 2004 quarter to 47.15 per cent in the June 2004 quarter.

In Indian Overseas Bank, FIIs increased their holding by 1.76 per cent to 5.15 per cent in June 2004. They hold 3.39 per cent stake in bank at the end of the March 2004 quarter.

In Canara Bank, FIIs holding increased from 11.76 per cent to 13.43 per cent and in Union Bank of India from 12.83 per cent to 13.81 per cent during the quarter.

FII holding in Bank of Rajasthan, Centurion Bank, South Indian Bank, Karnataka Bank, UTI Bank and Global Trust Bank declined by more than one percentage points during the quarter.

In Bank of Rajasthan, FIIs reduced their stake from 1.44 per cent in March 2004 quarter to just 0.07 per cent in June 2004.

In Centurion Bank, FIIs holding declined from 23.16 per cent to 22.13 per cent, in South Indian Bank from 1.73 per cent to 0.17 per cent and in Karnataka Bank from 4.71 per cent to 2.76 per cent during the quarter.