Despite foreign institutional investors (FIIs) being net sellers since a couple of weeks, research data and market players notice their growing faith in Indian firms and rising investments. Better than expected growth numbers, robust and stable economy are the irresistible factors for FIIs to invest in India, say experts.
Data by CNI Research Ltd said FIIs have increased stakes in 322 Indian companies in the third quarter of 2009-10 as against 293 companies in the second quarter of the same year. “This shows FII faith in India companies and the trend of rising investments in India,” said Kishore Ostwal, chairman and managing director of CNI Research Ltd.
“FIIs had been net sellers in the last two weeks mostly due to global concerns. One would want to pause and book profit at such times and that is what they did. With better than expected, over 16 per cent, growth in IIP numbers for December; robust growth with potential to hit the 10 per cent mark in future, FIIs will surely return,” said Dinesh Thakkar, chairman and managing director of Angel Broking.
As per Securities and Exchange Board of India (SEBI) data, FIIs invested over Rs 24,000 crore into stocks for October-December 2009 period, in both primary and secondary market. In the July – September quarter, the net FII investment had been of over Rs 33,000 crore. Though the investment amount has fallen during the corresponding quarters, FIIs have increase stake in more companies.
“Globally, the saving rate has been climbing and India is among the best bets to invest that money,” Thakkar said.
As per CNI Research data, of 322 companies, where there was an increase in FII stake in the last quarter, in 259 companies the stake increase as been up to 2 per cent, in 51 firms it is from 2-5 per cent, in seven firms its around 5-10 per cent and over 10 stake hike in five companies.