Foreign investors press sell button on Reliance stocks

Overseas investors have lowered their exposure to the companies from the two Reliance groups with sale of shares worth an estimated Rs 2,000 crore during the last quarter.

While FIIs (Foreign Institutional Investors) sold shares worth an estimated Rs 1,500 crore in the two listed companies from Mukesh Ambani-led Reliance Industries group, they also pared their stake in at least four companies from Anil Ambani- led Reliance Group during the quarter ended June 30, 2012.

FIIs lowered their stake in Reliance Industries Ltd (RIL) from 17.55 per cent to 17 per cent, while their holding in Reliance Industrial Infrastructure Ltd (RIIL), the second listed company of Mukesh Ambani-led group, fell from 6.24 per cent to 5.32 per cent.

In the group led by younger Ambani sibling Anil, the FII holding has declined in RCom, Reliance Capital, Reliance Broadcast Network (RBN) and Reliance Media Works (RMW). Two other companies from the group, R-Power and R-Infra, are yet to disclose their latest shareholding pattern.

While the decline in FII holdings are marginal in all the cases, it is rare that all the companies from the two groups have witnessed a fall at the same time.

The FII holding in RCom declined from 7.4 per cent to 6.98 per cent, while the same in Reliance Capital fell from nearly 21 per cent to 20 per cent. In RBN, the FII holding dipped from 1.4 per cent to 1.35 per cent, while it has fallen from 0.19 per cent to 0.14 per cent in RMW.

However, in case of RIL, one of the most valued companies in the country, saw at least two major investors, state-run insurance giant LIC and Government of Singapore, hiking their stakes in the company with purchase of shares worth over Rs 1,550 crore during the last quarter.

Life Insurance Corp of India (LIC) increased its stake in RIL from 7.09 per cent to 7.77 per cent, while Government of Singapore hiked its holding from 1.06 per cent to 1.22 per cent in the three-month period ended June 30, 2012.

At the current market price, the additional shares purchased by LIC during the quarter are worth about Rs 1,450 crore, while that of Singapore government is worth about Rs 100 crore.

On the other hand, the holding of another major non- promoter shareholder, Franklin Templeton Investment Funds, in the company declined marginally by 4.26 lakh shares (worth about Rs 31 crore) to 1.22 per cent.

The promoter holding in RIL rose by 0.4 per cent to 45.15 per cent during the quarter, while the holding of DIIs (Domestic Institutional Investors) rose from 10.71 per cent to 11.2 per cent.