FII holdings in Reliance Industries hits record high
Oct 22, 2020
Mumbai (Maharashtra) [India], October 22 : The Foreign Institutional Investors (FIIs) holding in Reliance Industries has reached a record high of 27.2 per cent by September-end, up 60 basis points from the preceding quarter, according to a JP Morgan's report.
The share pattern disclosure of billionaire Mukesh Ambani-led Reliance Industries (RIL) on the Bombay Stock Exchange showed foreign portfolio investment holding at 25.2 per cent stake, with FIIs and qualified institutional buyers (QIBs) holding another 2.05 per cent.
"As has been the case now for two years, FII's stakes in RIL hit new highs and increased by 60bps q/q. Surprisingly, MF's stake declined by 25bps q/q and was the second straight quarter of stake decline. The last time we saw domestic MFs reduce their holdings in RIL over two straight quarters was back in 2016," JP Morgan said in its report.
Reliance is the only Indian energy sector company where FIIs have raised stake in the last couple of quarters, while they reduced holding in oil marketing companies and gas companies. FII holdings in India's energy sector companies have come down sharply over CY20.
"Over 2020, we have seen very large declines in FII holdings in metals and energy, with holdings in many stocks at 10-12-year lows. Given the strong pricing and earnings environment, especially in metals, the sell-down is not explained by the near term earnings outlook," the report said.
"In our view, this broad trend is also likely driven by value's underperformance globally, and hence global investors going further UW in the resource spaces and worries of COVID-19 impacting economies well into 2021. In 2020, unlike previous years, domestic MFs have not stepped in to offset the FII sell-down and we are seeing both sets of investors reduce stakes across most of the energy and metal stocks," it added.
In the last six months since April 20, RIL share price has doubled, as it went on to raise over Rs 152,000 crore in Jio, Rs 53,124 crore in Rights Issue, over Rs 37,700 crore in Reliance Retail and Rs 7,600 crore from BP for the fuel retailing partnership.
The FII sell-down across energy stocks continued with large sell-downs in oil marketing companies (30-60bps q/q), upstream and gas stocks. The sell-down in gas stocks was the largest and continuing for a year now.
