Foreign institutional investors (FIIs) have pared stake in Infosys Technologies marginally during the July-September quarter, but some of its biggest institutional investors — including Life Insurance Corporation of India (LIC), sovereign funds of the government of Singapore and Abu Dhabi Investment Authority — hiked their stakes in the Bangalore-based IT firm.
During the quarter, FIIs reduced stake in Infosys from 36.88 per cent to 36.66 per cent, and the share fell 13.66 per cent from Rs 2,934 to Rs 2,533 apiece.
However, nine out of 10 institutional investors, which held more than one per cent stake in the firm, used the fall in share price to raise their holdings during the quarter, according to the company’s filings with stock exchanges.
Retail investors, who own shares worth up to Rs 1,00,000, pared their stakes in the company by 1,16,798 shares through the quarter, though the number of investors rose during the same period. However retail investors, who own shares in excess of Rs 1,00,000, rose in number by seven to 372, who collectively added a total of 4,56,635 shares during the quarter.
Hemant Kanawala, head of equities at Kotak Mahindra Old Mutual Life Insurance, said institutional investors added Infosys shares as the stock corrected sharply while small retail (investors) sold as they got influenced by the market momentum.
LIC added 35.01 lakh shares raising its stake to 5.49 per cent from 4.88 per cent. Foreign investor Oppenheimer Developing Markets Fund added 1.89 lakh shares raising its stake to 2.71 per cent from 2.67 per cent. Abu Dhabi Investment Authority (bought 19.79 lakh shares) to 2.13 per cent; ICICI Prudential Life Insurance Company (bought 9.65 lakh); Vanguard Emerging Markets Stock Index Fund ( bought 13.51 lakh); government of Singapore (5.45 lakh); Aberdeen Asset Managers (21 lakh); HDFC Trustee Company (5.12 lakh) and Bajaj Alliance Life Insurance Company (82,500).
Only institutional investors to pare stake in Infosys was Franklin Templeton Investment Funds, which sold 14,000 shares).
On an aggregate basis, FII stake in Infosys was down marginally to 36.66 per cent from 36.88 per cent, while the total number of individual FIIs holding the stock came down from 948 to 907.
“When the stock corrected in the last quarter, it was more on uncertainty on FY13 earnings. FY13 earnings estimate continued to be challenging and it will determined only by April 2012,” Kanawala said.
“Because rupee has appreciated 10 per cent, Infosys’ rupee guidance has also gone up. Given that dollar will continue to remain strong, it will help the company,” Kanawala added.
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“The profitability guidance is robust as the EPS guidance in dollar terms has been raised and EPS guidance in rupee terms has been increased significantly due to higher rupee/dollar expectation (48.98 compared to 44.5 earlier),” said Rohit Kumar Anand, an IT analyst with PINC Research.
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