A majority of the Tata Group companies saw a rise in foreign institutional investor (FIIs) holdings in September quarter even as domestic institutional investors (DIIs) cut their holdings in nine of the 14 listed Tata firms. FII holdings rose in 10 companies, while it remained unchanged in two.
According to market experts, DII selling seen in Tata Group reflects the wider mood in the markets. Domestic players have largely been net sellers, while FIIs have remained bullish on Indian stocks. Apart from this, certain fund houses may be cutting their stake owing to redemption pressures, said Dipen Shah, head (research), Kotak Securities.
Among the flagship Tata firms, DIIs cut their holding by 32 basis points (bps) in TCS, while FIIs raised their holding by 42 bps. Tata Steel, Indias biggest steel player by market value, saw a 21 bps fall in DII holding, while overseas investors shored up their holding by 36 bps.
Tata Global Beverages, worlds second largest mazufacturer and tea distributor, saw sharpest rise in FII holding of 276 basis points even as DIIs cut their stake by 161 bps.
In year-to-date, FIIs have pumped in more than $16 billion in Indian markets, while DIIs have been net sellers of nearly $11 billion worth of equities. In last three months, DIIs have sold $3.37 billion worth of shares.
Experts feel domestic players are booking profit. Scrips such as Tata Motors which recently touched a life-time high are seeing profit-taking from domestic players. Meanwhile, fund houses have been reducing their exposure to Tata Steel as its overseas operations remain under stress, said Rikesh Parikh, vice-president (equities), Motilal Oswal Securities.
According to a quarterly report by Morningstar, fund houses sold 1.22 crore shares of Tata Motors in the September quarter. The automaker touched its all-time high of R400 on November 6.
Insurance companies have a mixed view on Tata companies. We have sold Tata Steel and TCS scrips, but have re-entered the stocks. However, we are underweight on Tata Steel and Tata Power, said Nirakar Pradhan, chief investment officer, Future Generali India Life Insurance.