Calcutta, Oct. 15: Foreign institutional investors (FIIs) have raised their holding substantially in Maruti Udyog Ltd over the last three months.
FIIs now hold 13.7 per cent in the countryís largest passenger car company. They are believed to have increased their stake in Maruti by over 5 per cent since the companyís shares were listed in early July.
Foreign funds picked up around 8.3 per cent of Marutiís shares from its public offering. Despite huge over-subscription from among foreign funds, around 30 per cent of the 7.94 crore shares sold through the public issue was allotted to 50 FIIs.
But now the likes of Merrill Lynch and Morgan Stanley hold about 50 per cent of the companyís floating stock ó or shares available for trade on bourses.
Janus Overseas Fund has the largest holding in the company after Suzuki Motor Corporation and the Indian government. Janus holds 30.8 lakh shares or a 1 per cent stake in Maruti now.
Among foreign institutions, Government of Singapore Investment Corporation and Templeton had scooped up the highest number of shares from the initial public offering (IPO).
Indian institutions and mutual funds felt the issue was over-priced. They picked up around 2.75 per cent of Marutiís shares from the IPO. Only UTI Mutual Fund was bullish. It had applied for over 2 crore shares in the IPO but received only 18 lakh.
But after listing, Indian mutual funds appear to have developed an appetite for the stock. They now hold 4.14 per cent of the companyís shares. The combined holding of domestic financial institutions and mutual funds is 4.75 per cent.
While foreign funds and domestic institutions have increased their holding in Maruti, the stake held by retail investors has gone down.
Sixty per cent of the shares sold by the government was allotted to retail investors, which implies public holding in the company was around 16.5 per cent at the time of listing. But now it has fallen to 9.05 per cent.
The consistent buying in Maruti is evident from the rise the stock has witnessed over the last six months. Shares were issued at Rs 125 in the IPO but listed at Rs 157 on July 9.
The stock has gained more than 75 per cent in three months. It had scaled Rs 280 a couple of days ago. It is currently trading at a little over Rs 270.
Suzuki Motor Corporation holds 54.21 per cent of Marutiís shares, while the government controls 18.28 per cent. Together they hold 72.49 per cent in the company.
Despite the overwhelming interest evinced by institutional investors, the investment banks that managed the issue decided to allot more shares to retail investors. This ensured that on listing, there was enough institutional interest in the stock to balance the selling from among retail investors.
The remarkable rally in the share price of Maruti has forced analysts and brokerages to revise price targets a number of times.