The combined stake of foreign institutional investors (FIIs) in the top 500 Indian companies has dropped to a two-year low of 18.18 per cent as on June 30, 2008 from a high of 19.86 per cent in the corresponding period a year ago. The fall is due to the sharp decline in the market value of shares coupled with a record outflow of Rs 60,000 crore in the first half of the calendar year 2008.
The data pertains to the BSE 500 companies, which account for almost 93 per cent of the total market capitalisation of all listed firms on BSE. With the market falling by 23 per cent in the January-March quarter and another 14 per cent in the April-June quarter, the overall market-cap of the BSE 500 companies fell by 39.3 per cent in the first six months this year.
Domestic institutions, including banks, financial institutions and insurers, have raised their holdings from 5.67 per cent to 5.88 per cent in the same period. They were net buyers to the tune of Rs 45,000 crore in the period under review, which explains the rise in their combined stake despite a drop in the market cap of the BSE 500 companies.
The stake held by public and other corporate bodies has dropped from 17.06 per cent to 16.73 per cent in the period.
| TWO-YEAR LOW | ||||
|
Ownership of India Inc* | ||||
| Jun-07 | Dec-07 | Mar-08 | Jun-08 | |
| Promoters | 53.48 | 56.53 | 55.87 | 55.33 |
| FIIs | 19.86 | 18.39 | 18.23 | 18.18 |
| Domestic institutions | 5.67 | 5.24 | 5.68 | 5.88 |
| Mutual funds/UTI | 3.93 | 3.68 | 3.95 | 3.88 |
| Others, including public | 17.06 | 16.16 | 16.26 | 16.73 |
| * Figures in % | ||||
Mutual funds saw a marginal drop in their stake from 3.93 per cent to 3.88 per cent, though they were net buyers of Rs 6,500 crore worth of shares. As per the portfolio as on July 31, 2008, the MFs are sitting on cash worth Rs 23,500 crore in equity-related funds.
The promoters’ group, including government ownership of state-owned companies and ownership by multinational companies, has increased by over 185 basis points (one basis point is 1/100th of a percentage point) to 55.33 per cent, largely on account of many Indian promoters jacking up shares through creeping acquisitions, preferential offers and listing of new entities where promoter-holdings were as high as 80 per cent.
