The government may be preparing to offload its holding in several public sector majors but foreign institutional investors (FIIs) may not be very keen to buy them.
In the year gone by, leading public sector majors lagged in attracting foreign institutional investors in comparison to the private sector players even as the FII’s pumped in a net of Rs 128,360 crore ($24.37 bn) lifting the Sensex at the Bombay Stock Exchange25.7 per cent.
According to the shareholding data for the year ended December 2012 announced by 20 companies out of the 30 that form the Sensex, private sector leaders such as —HDFC, Tata Power, Tata Motors , HDFC Bank and Infosys — were the biggest gainers of FII inflow.
In HDFC, the FII holding went up by almost 7 percentage points from 66.2 per cent in December 2011 to 73.2 per cent in December 2012. Similarly, HDFC bank witnessed a hike in its FII holding by 4 percentage points. However, in the same period the State Bank of India, which has a slightly higher market capitalisation than HDFC Bank, witnessed a hike in its FII holding by 1.8 percentage points. This means significantly higher investment in absolute terms chased the private sector.
Thirteen banks that are part of the banking index at the BSE have announced their holding pattern as on December 2012. While 4 PSU banks (out of 6 that have announced their numbers) witnessed a decline in their FII holding in the calendar 2012, private banks such as IndusInd Bank, HDFC Bank and Axis Bank saw significant gains in their FII holding of over 3.5 percentage points.
Two state-owned banks — Bank of Baroda and SBI — FII’s raising their stakes. Bank of Baroda, which has one of the lowest net NPA numbers of 0.82 per cent among the PSU banks as on September 31, 2012, saw a rise in its FII holding by 2.5 percentage point in the year.
Six public sector majors are part of the Sensex and five of them barring ONGC have announced their shareholding for the year ended December 2012. No PSU major figured in the top 5 companies that saw maximum gain in their FII holding in percentage point terms. BHEL which has a market cap of Rs 55,597 crore and has a 1.16 per cent weightage in Sensex saw the maximum interest from FII’s as they took up their holding in the company by 2.7