In the midst of a continuing legal battle over gas dispute between two Ambani groups, foreign investors seem to have got more confidence than the small individual investors of the country in the strength of the businesses run by the two industrialist brothers.
In the first quarter of the current financial year, foreign institutional investors (FII) increased their shareholding in nearly all the listed companies of the two Ambani groups, while individual domestic investors cut down their exposure to these companies during the same period.
These companies include Reliance Industries (RIL) and Reliance Petroleum (RPL) from the Mukesh Ambani group as also Reliance Capital, Reliance Communications (RCom), Reliance Infra and Reliance Natural Resources (RNRL) from the Anil Ambani group.
Interestingly, the three-month period ended June 30, 2009, saw the Bombay High Court delivering its judgement in a long-running legal battle between the two groups over supply of gas from elder brother Mukesh-led RIL to Anil group firm RNRL.
However, the battle has now moved to the Supreme Court as both the sides have filed cross-appeals over the Bombay High Court order of June 15.
In minor exceptions, another Mukesh Ambani group firm Reliance Industrial Infrastructure (RIIL) saw the small individual shareholders cutting down their holding, but FIIs also did the same albeit in a small way. On the other hand, Anil Ambani group's Reliance Power saw the shareholding of both FIIs and domestic individual small investors remain unchanged during the quarter.
In terms of changes in their shareholding, FIIs seem to have turned most bullish on Reliance Infra, where their holding increased by over 3 percentage points to 18.85 per cent at the end of April-June quarter, from 15.79 per cent previously. At the same time, the small individual shareholders --those holding shares worth up to Rs 1 lakh -- cut down their holding from 12.84 per cent to 12.04 per cent.
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FIIs also increased their holding by one-two percentage points in three other Anil Ambani group firms -- Reliance Cap, RCom and RNRL, while that rose by one percentage point in Mukesh Ambani group's Reliance Petroleum.
In RIL, FIIs increased their holding to 16.45 per cent, from 15.99 per cent, while small investors cut down their holding from 9.98 per cent to 9.87 per cent.
In RPL, the FIIs' holding rose from 1.56 per cent to 2.6 per cent, while that of small investors fell from 11.64 per cent to 10.86 per cent.
The fall in small investors' holding was most pronounced in RIIL (from 40.32 per cent to 38.50 per cent) and Reliance Cap (from 14.53 per cent to 13.03 per cent). However, RIIL also saw FII holding fall marginally from 1.01 per cent to 0.94 per cent, while that of Reliance Cap rose from 20.43 per cent to 22.41 per cent.
Among other companies, RCom saw FII holding rise from 7.39 per cent to 9.35 per cent and RNRL from 3.11 per cent to 4.81 per cent. On the other hand, RCom and RNRL saw the holding of small individual investors fall from 9.63 per cent to 9.33 per cent and from 29.71 per cent to 28.29 per cent, respectively.
At R-Power, the most recent entry into the stock market from either of the two groups, interestingly saw the holding of FIIs as also small individual investors unchanged at 3.82 per cent and 7.25 per cent, respectively.
The promoter holdings in all these companies remained largely unchanged during the quarter.