Mumbai: Shares of Indian firms where Bear Stearns Asset Management Ltd (BSMA) has stakes took a big hit last week after the FII (foreign institutional investor) sold heavily as its parent Bear Stearns Companies Inc., the fifth largest US investment bank, agreed to a $2 (Rs81) a share takeover from JPMorgan Chase and Co.
The bulk deals data from bourses indicated more than Rs1,000 crore worth of sales by BSMA in just two trading days—14 March and 17 March.
Among a dozen big FIIs in India, BSMA’s portfolio ranks third from the bottom. The fund’s end-December portfolio, at Wednesday’s price, was worth Rs2,491 crore.
A Mint analysis of Indian portfolios of some of the global investment banks, brokerages and their subsidiaries shows that the biggest stock portfolio is owned by German group Deutsche Bank AG and its affiliates, valued at Rs33,579 crore.
The stock portfolio is based on the quarterly shareholdings data available with the Bombay Stock Exchange (BSE), which lists investors with more than 1% stakeholding as on 31 December. Since then, there could have been changes in their portfolios. Besides, the BSE data only refers to those firms in which these funds hold at least 1%. The valuation of their portfolios is based on the market price of the stocks as on 19 March.
New York-based Citigroup Inc. and London-based HSBC Holdings Plc. own the second and third largest portfolios.
“A large part of this portfolio is participatory notes (PNs) held on behalf of our clients,” said Ravi Kapoor, managing director and head of equity capital markets at Citigroup Global Markets India Pvt. Ltd. PNs are offshore derivatives of Indian stocks sold by registered FIIs in India to their foreign clients.
Two US investment banks, Morgan Stanley and Merrill Lynch and Co. follow the table toppers. Hong Kong-based brokerage CLSA Asia-Pacific Markets, majority owned by French banking group Credit Agricole SA, comes next.
Goldman Sachs Group Inc., the world’s most profitable investment bank, owns Indian stocks worth Rs7,307 crore, while US-based JPMorgan has a Rs6,835 crore kitty.
Swiss bank UBS AG with 5,848 crore worth of stockholding in India, held mostly under its subsidiary Swiss Finance Corp. (Mauritius) Ltd, is the ninth largest in this group followed by BSMA.
Interestingly, BSMA had begun selling stocks during the third quarter of financial year 2008, ending December .
While BSMA had 103 firms in its portfolio at the end of the second quarter in September, by end-December, it was down to 86. The big names among the stocks offloaded by it include CEAT Ltd, Dabur Pharma Ltd, Eveready Industries Ltd, Everest Kanto Cylinder Ltd, IVRCL Infrastructures and Projects Ltd, Shipping Corp. of India Ltd and SpiceJet Ltd.
Meanwhile, BSMA also bought a substantial stake, worth more than $150 million, in Jaiprakash Associates Ltd, the latest entrant in BSE’s benchmark Sensex.
Similarly, Lehman Brothers Holdings Inc., which wrote down $1.8 billion mark-to-market losses in its first quarter results, had sold some of its stakeholdings in Indian companies, even as it released a bullish report on the country titled India: Everything to Play For in October 2007.
While Lehman had more than 1% stake in 29 companies at end-September, it had cut down the portfolio to 14 companies by end-December.