Mumbai: In the midst of a continuing legal battle over gas dispute between two Ambani groups, foreign institutional investors (FIIs) seem to have got more confidence than the small individual investors of the country in the strength of the businesses run by the two industrialist brothers.
In the first quarter of the current fiscal year, FIIs increased their shareholding in nearly all the listed companies of the two Ambani groups, while individual domestic investors cut down their exposure to these companies during the same period.
These companies include Reliance Industries and Reliance Petroleum Ltd from the Mukesh Ambani-led group; and Reliance Capital, Reliance Communications, Reliance Infra and Reliance Natural Resources Ltd (RNRL) from the Anil Ambani-led group.
Interestingly, the three-month period ended 30 June 2009, saw the Bombay high court delivering its judgement in a long-running legal battle between the two groups over supply of gas by RIL to RNRL.
However, the battle has now moved to the Supreme Court as both the sides have filed cross-appeals over the Bombay high court order of 15 June
In minor exceptions, another Mukesh Ambani-led group firm Reliance Industrial Infrastructure Ltd (RIIL) saw the small individual shareholders cutting down their holding, but FIIs also did the same albeit in a small way. On the other hand, Anil Ambani-led group’s Reliance Power saw the shareholding of both FIIs and domestic individual small investors remain unchanged during the quarter.
In terms of changes in their shareholding, FIIs seem to have turned most bullish on Reliance Infra, where their holding increased by over 3 percentage points to 18.85% at the end of April-June quarter, from 15.79% previously. At the same time, the small individual shareholders - those holding shares worth up to Rs1 lakh - cut down their holding from 12.84% to 12.04%.
FIIs also increased their holding by one-two percentage points in three other Anil Ambani group firms - Reliance Cap, RCOM and RNRL, while that rose by one percentage point in Mukesh Ambani group’s Reliance Petroleum.
In RIL, FIIs increased their holding to 16.45%, from 15.99%, while small investors cut down their holding from 9.98% to 9.87%.
In RPL, the FIIs’ holding rose from 1.56% to 2.6%, while that of small investors fell from 11.64% to 10.86%.
The fall in small investors’ holding was most pronounced in RIIL (from 40.32% to 38.50%) and Reliance Cap (from 14.53% to 13.03%). However, RIIL also saw FII holding fall marginally from 1.01% to 0.94%, while that of Reliance Cap rose from 20.43% to 22.41%.
Among other companies, RCOM saw FII holding rise from 7.39% to 9.35% and RNRL from 3.11% to 4.81%. On the other hand, RCOM and RNRL saw the holding of small individual investors fall from 9.63% to 9.33% and from 29.71% to 28.29% respectively.
At R-Power, the most recent entry into the stock market from either of the two groups, interestingly saw the holding of FIIs as also small individual investors unchanged at 3.82% and 7.25% respectively.
The promoter holdings in all these companies remained largely unchanged during the quarter.