Foreign holding in Sensex firms surges

FII holding in Infosys & Satyam moves up to 42%, 51% resp in FY04.

Foreigners today own two-fifths of the private companies in the Sensex, and their share is rising fast. Total foreign holding in these companies has increased sharply in the past year, from 36.28 per cent in March 2003 to 40.21 per cent in March 2004.

Much of this increase was on account of investment by foreign institutional investors, which boosted their stakes in the country's premier private companies from 18.07 per cent to 22.60 per cent over the past year.

Many of India's finest companies are now owned mainly by foreign investors, including companies like Infosys, Satyam, HDFC and ICICI Bank.

Foreign holding in companies (in %)
Company	FII holding		Total foreign holding
	Mar 04	Mar 03	Mar 04	Mar 03
HDFC	61.55	51.49	76.94	73.83
ICICI Bank	46.71	38.40	72.79	64.71
Satyam	51.27	43.02	63.28	55.18
Infosys	41.82	39.18	50.45	43.45

Nine companies in the Sensex now have a majority of their shareholding in the hands of foreign investors, while in 13 of them the foreign holding amounted to above 40 per cent.

Foreign investors increased their stake in HDFC from 73.83 per cent to 76.94 per cent in the past year, while the foreign shareholding in ICICI Bank went up from 64.71 per cent to 72.79 per cent.

Foreign investors have been increasing their stakes in public sector undertakings (PSUs) as well. During the past year, the total foreign holding in PSUs increased from 7.44 per cent to 11.49 per cent.

The foreign shareholding in HPCL rose from 10.53 per cent at the end of March 2003 to 20.03 per cent by March 2004. Analysts say that the cap of 20 per cent is the only factor that is holding back increased foreign investment in the State Bank of India.

The lower foreign shareholding in PSUs, however, has led to their total share in the 30 Sensex companies being only 31.43 per cent, down from 28.70 per cent last year. Most of the foreign holding is on account of FIIs, which increased their share in the Sensex companies from 14.74 per cent to 18.68 per cent over the past year.

The FII share in the PSU companies in the Sensex moved up from 5.43 per cent to 9.76 per cent over the same period. Analysts point out that as the government divests its stake in the PSUs, the FII stake will increase, resulting in higher levels of foreign holding.