Foreign ownership is on rise in Indian cos

Investment in equity through GDRs reach $311 b

Despite global economic uncertainty, the interest of foreign investors in Indian companies does not appear to be on the wane, according a study.

According to Kotak Institutional Equity Research, ownership by foreign portfolio invest-ors in the BSE200 Index, which includes ADRs an GDRs, reached $311 billion in the June quarter — a nearly seven growth in just three months.

The foreign portfolio investment at the end of the March 2016 quarter was $291 billion.

Their holdings in BSE-200 companies in percentage terms increased to 24.9 per cent against 24.5 per cent in the previous quarter.

Domestic institutional investors (DIIs) holdings in BSE-200 companies lagged behind and increased to 11.4 per cent in the June quarter from 11.1 per cent at the end of the previous quarter

While both foreign and domestic investors appe-ar to be bullish on the prospects of Indian companies, their priority sectors seem to differ. For instance, sectorwise foreign investors are interested in investing in banking and technology sectors and not so keen on consumers and industrial sectors.

Indian mutual funds are bullish about the prospects of industrials and banking sectors. They, however, do not appear to be very much interested in consumer, technology and metals and mining.

Whilst foreign investors bought in sectors such as automobiles, banking and energy, domestic investors sold stocks in auto and cement and increased their stake in pharma. The highest increase in the stakes of FPIs were in Bharat Financial Inclusion, HDIL and Castrol India whilst MFs were in Castrol India, Ipca Labs and United Breweries.